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NATURAL LAW IN THE BUSINESS WOELD. 



v 



NATURAL LAW 



IN THE 



BUSINESS WORLD. 






BY 

HENRY WOOD. 

) 






"Of Law, there can be no less acknowledged than that her seat is the 
bosom of God, her voice the harmony of the world : all things in heaven 
and earth do her homage, the very least as feeling her care, and the 
greatest as not exempted from her power." 

Richard Hooker, 1553-1600. 



87 ' 



BOSTOX: 
LEE AND SHEPARD, PUBLISHERS, 

NEW VOKK: 

CHARLES T. DILLINGHAM. 

1887. 



\ 



Copyright, 

1887, 

By HENRY WOOD. 



All rights reserved. 



Alfred Mudge & Son, Printers, Boston. 



PEEFACB. 



TN presenting this little volume to the public, 
the writer makes no claim to any new dis- 
coveries, or original theories in the domain of 
Political Economy ; nor has he any ambition to 
enter into philosophical or theoretical specula- 
tions. An honest effort to trace out the work- 
ing and application of Natural Law, as it runs 
through the economic and social fabric, in a 
plain and simple, though it is hoped practical 
manner, is all that is attempted. 

Economic w T orks by theorists and special- 
ists have been multiplied to such an extent, 
that it seems almost presumptuous for one who 
has had only a practical business training to 
venture into a field already so thoroughly ex- 
plored. It is, however, the belief of the writer, 
that in a great majority of recent works, the 
sure, continuous, and unerring operation of 
certain fixed principles, and their resultant 
effects, has been greatly overlooked or ignored. 
and sentimental and impractical theories have 
been substituted for them, 



6 PREFACE. 



Such a variety of new plans, radical changes, 
and "reforms " have been proposed, in order to 
improve existing conditions, that the world 
must be re-made in order to give them an op- 
portunity to be tried. 

Fixed and immutable laws must be bent or 
broken so as to fit and harmonize with pet 
theories and individual prejudices. Is it not 
the better way to make, some effort to detect 
and bring to light the lines along which these 
natural and fundamental principles are opera- 
tive, and then look for improvement by striv- 
ing to put ourselves more nearly in harmony 
with them ? If they are irreversible and con- 
tinuous, let us make peace with them, rather 
than provoke a conflict. The ills of our social 
system, the hardships of labor, and the in- 
equalities of fortune cannot be got rid of by 
any short-cut route of social revolution, or 
industrial transformation. Circumstances and 
conditions may change, but principles never. 
Wealth has always been the natural sequence 
to industry, temperance, and perseverance, and 
it will always so continue. 

In regard to the labor question, the writer 
will yield to no one m respect to his sympathy 
for, and interest in the laboring man, but he 
looks for his improvement and elevation in an 



PREFACE. 



entirely different direction from the majority 
of those who claim to especially champion his 
cause. There can be no active antagonism 
between different wheels of the same machine, 
without disastrous results to all. The true 
ideal of society is a complete and rounded 
unity, but this unity is made up of variety. 
Like the different parts of a vast mechanism, 
this variety must be harmonious. 

The plain words of this book are in no sense 
directed against labor, but only against the 
abuses and evils that masquerade under its 
banner. Class prejudice, so persistently stimu- 
lated by some agitators, is disastrous to busi- 
ness confidence and prosperity. Demand for 
labor and products cannot be coerced, but har- 
mony will stimulate and increase it. Our ob- 
ject in this work is to promote the interest of 
labor, which is the interest of society. We en- 
deavor to point out the natural and solid high- 
way to success, through industry, merit, and 
economy, and how to avoid the treacherous 
quagmires of antagonism, coercion, and tyr- 
anny, which end in business stagnation and 
idleness. The conclusions arrived at are not 
mere matters of choice, but the logical result of 
unchanging natural principles. We acknowl- 
edge our indebtedness for facts and statistics to 



8 PREFACE. 



the writings of Adam Smith, J. S. Mill, Ri- 
cardo, the Duke of Argyll, W. Stanley Jevons, 
John B. Jervis, Prof. A. T. Hadley, Prof. F. 
A. Walker, Edward Atkinson, W. B. Weeden, 
and C. S. Ashley. 

The substance of a few of the following chap- 
ters has appeared in occasional articles in the 
public press. 



CONTENTS. 



PAGE 

I. General Principles 11 

II. Supply and Demand 21 

III. Labor, Laborers, and Production . . . 35 

IV. Labor Combinations and their Effect on 

the Laborer 51 

V. Socialism 77 

VI. Dependence and Poverty 89 

VII. Employers and their Duties 97 

VIII. State Arbitration 109 

IX. Can Capital and Labor be harmonized? . 117 

X. Economic Legislation and its Proper 

Lfmits 129 

XI. Wealth, and its Unequal Distribution . l±o 

XII. Centralization of Business 101 

XIII. Alternations of Prosperity and De- 

pression L73 

XIV. Railroads, and Railroad Consolidation, 187 
XV. The Corporation 206 

XVI. Conclusion 215 



GENERAL PRINCIPLES. 



" Mark what unvaried laws preserve each state, 
Laws wise as nature, and as fixed as fate." 



1 There is a higher law than the constitution." 

William E. Seward. 

1 All are but parts of one stupendous whole. 
Whose body nature is, and God the soul." 

Pope, 



GENERAL PRINCIPLES. 

TN order to make any real progress in the 
study of Natural Law, it is imperative that 
we should divest ourselves of all prejudices, 
pet theories, and predilections, and preserve a 
frame of mind that is thoroughly impartial. 
We must make an unbiassed and persistent 
search for existing orders of events, and con- 
secutive occurrences, as they already are, rather 
than as we would like to find them. If the 
facts do not conform to our preconceived idea-, 
we must beware of trying to bend or break 
them in order "to produce a seeming harmony 
or conformity. For example, several recent 
writers have made an effort to suspend or abol- 
ish the natural law of competition, especially 
as applied to labor. This principle does not tit 
into their ideal system, and must therefore be 
set aside. It is bad policy to pick a quarrel 
with established truths, and in such a conflict, 
one is likely to emerge Prom it in much the 
same condition as Don Quixote found himself 
after his combat with the wind-mill. In order 



14 NATURAL LAW IN THE BUSINESS- WORLD. 

to arrive at right conclusions, a candid and 
patient search for truth is necessary, even if it 
upsets our cherished plans and desires. The 
principle of competition as applied to labor 
may seem cruel and offensive, but if it is a nat 
ural one, let us recognize it, and try to discover 
whether there are not other laws in operation 
which will have the effect to modify or counter- 
act its apparently undesirable features, and so 
let it keep its place, where it has some good 
use as an essential factor in a complete system. 
Natural Law, as applied to the domain of 
Political Economy, is defined by Webster as 
"a rule of conduct arising out of the natural 
relations of human beings, established by the 
Creator, and existing prior to any positive pre- 
cept." Natural Law in the business world is not 
a different law from that which runs through 
physics or morals, mechanics or chemistry. It 
is but one of the many subdivisions of Universal 
Natural Law, or the grand Unity of Truth. In 
other words, the principles which reign in the 
department of economics are not artificially 
fenced off in a field by themselves, but they 
have a most intimate connection with all the 
other subdivisions of orderly facts. There is 
also a corresponding kinship in error. With 
false premises and a colored medium, not only 



GENERAL PRINCIPLES. 15 

one truth is. transformed, but all its relations 
are also distorted and colored, so that all are 
apparently of the same general hue. In this 
way systems of error are built up, for with one 
error for a starting point, a whole series must 
be evolved to harmonize with it. 

The lines of Natural Law in the business world 
may not be so clear cut and mathematical in 
their character as are those in some other parts 
of the general field, but the evidence of their 
existence is just as perfect and convincing. 
They are so interlaced and mingled with human 
or legislative law on the one hand, and with a 
purely mental and moral economy on the other, 
that any study of one is impossible, except in 
connection with the others. They shade into 
each other so perfectly that no line of demarca- 
tion is visible. The general perception of the 
uniform and universal reign of law has grown with 
the growth of knowledge, and at the present time 
the highest aim of science is its fuller discov- 
ery, classification, and interpretation. Natural 
Law is but another name for the expressions and 
methods of the Creator. That being the case, 
it is evident that all just and wholesome human 
enactments must be founded upon it. That 
this true foundation is more generally recog- 
nized and built upon at the present time than 



16 NATURAL LAW IN THE BUSINESS WORLD. 



in any past age, is obvious ; and this is espe- 
cially the case where constitutional and demo- 
cratic forms of government prevail. ^luinan 
law and legislation is the will of societ/, and 
although it may put limits on individual will, it 
is yet indispensable to human welfare. The 
communistic dream of a possible ideal condition 
of society can never be realized, for the reason 
that man is naturally selfish. Such conditions 
could only be successful on a planet where un- 
selfishness is the normal condition. There has 
been a steady improvement in human laws and 
government, in just the proportion that Natural 
Law has been understood and interpreted. 
Step by step the patriarchal, tribal, and various 
other forms of government have played their 
part, and have led up to the modern state, 
which is the most wiiolesome condition of 
society yet evolved. Further improvement 
will follow in proportion as the lines of Natural 
Law shall be wrought into the warp and woof 
of the social fabric. The key to progress, com- 
pleteness, and approximate perfection in every 
department, whether physical, mental, moral, or 
even spiritual (as Prof. Drummond has so ably 
demonstrated in his book " Natural Law in the 
Spiritual World ") , is conformity to law. Take 
a few illustrations : A thorough observance of 



GENERAL PRINCIPLES. 17 

hygienic law tends directly to healthful, normal, 
and perfect bodily development. A greater 
or less transgression brings a proportionate 
penalty. The penalty must be paid whether 
the violation be knowingly or ignorantly com- 
mitted. A headache and nervous" depression 
are very certain to follow a prolonged drunken 
revelry, but no more so than are panic and busi- 
ness stagnation to come after an era of wild 
speculation. That physical disease, the effect 
of which is to gradually thin the blood toward 
a watery basis, when it continues unchecked, is 
no less certain in its logical results than will be 
the degradation of our monetary sj r stem to a 
silver basis, if the process of dilution indefinitely 
continues. Erroneous legislation may for a 
while prevent the full assertion of this law, 
but it is nevertheless an active, living force, 
and is unceasingly pressing in the direction of 
its natural and logical fulfilment. A stream 
may be dammed on its way io the ocean, but 
the final tide-level of its waters is not a matter 
of question. It would be as reasonable to ex- 
pect to increase the efficiency of one Wade of 
a pair of shears by the mutilation oi' its com- 
panion, as to ivy io benefit either capital or 
labor by an antagonistic policy toward the 
other. Illustrations might be multiplied, 

2 



18 NATURAL LAW IN THE BUSINESS WORLD. 

Men often feel that they can transgress 
natural principles with impunity so long as 
they avoid the open violation and penalty of 
human legislation, forgetting that the penalty 
of the former is even more certain, and is 
the inevitable sequence of the transgression. 
They may try to persuade themselves that 
even eternal principles are elastic and sub- 
ject to exceptions, for the reason that they 
sometimes seem to fail to at once assert them- 
selves. One thing, however, is certain. If 
they apparently fail to vindicate themselves 
speedily, we may be sure that they are al- 
ways pressing in that direction, and will never 
be satisfied till the end is reached. We con- 
fine water in a tube, but its tendency to seek 
a level continues, and no human power can 
divest it of this inclination. Natural Law 
is a living force, persistent, reliable, and al- 
ways in its place and pressing to do its work. 
It is this very certainty and invariableness 
that enables us to use it, and to make it 
serve us. While, therefore, it is true that 
we are always under its sovereignty, it is no 
less true that when we make its acquaintance, 
and comply with its conditions, it becomes 
our most valuable and indispensable servant. 
Its powerful aid, like that of steam or elec- 



GENERAL PRINCIPLES. 19 

tricity, is always at our service, only we must 
not dictate its methods of operation. We 
make mistakes, and our lines of action cross 
each other, while its operations are harmoni- 
ous. They may counteract or modify each 
other, but never oppose, for truth cannot be 
in opposition to truth. The only warfare it 
wages is with error, and the conflict is an 
unceasing one. 



SUPPLY AND DEMAND. 



" All are needed by each one; 
Nothing is fair or good alone. 9 * 

Emerson. 



II. 

SUPPLY AND DEMAND. 

nppIE law of supply and demand is perhaps the 
most general and fundamental of all the 
brotherhood of natural laws, and we have direct 
relations with it at all times and under all cir- 
cumstances. It lies at the foundation of all 
modern commerce, civilization, invention, and 
science. It has been the main-spring and im- 
pelling force in every transaction, trade, or 
exchange, back to the time when man existed 
under the most primitive conditions. It was 
the basis of the first exchanges of flint arrow- 
heads and skins of wild beasts among savage 
and barbarous tribes, as it is also of all the 
endless and multiform currents and counter- 
currents of modern economic lite and society. 
Its force cannot be measured. Its pressure 
impels mankind to work its behests, in gather- 
ing, transporting, and exchanging the products 
of the globe, in order that these two principles 
may meet and satisfy each other. Men will 
penetrate to the heart of tropical Africa, or to 
the* iceberg regions o( the Arctic v.onc, they 



24 NATURAL LAW IN THE BUSINESS WORLD. 

will dive to the bottom of the sea, or delve in 
the bowels of the earth, to bring forth all the 
complex materials of supply, in order to make 
them equal to the grand aggregate of universal 
demand. No enterprise is too venturesome, 
no effort too daring. These two elements are 
like two halves of a sphere, neither complete 
without the other, and each waiting for and 
needing the other, as necessary to produce 
roundness and perfection. In the economy of 
the creation each of these factors is not only 
incomplete without the other, but each is evi- 
dence of the existence of the other. Even in 
the spiritual world, which is more beyond our 
comprehension, universal analogy teaches that 
as man was created with a natural desire or 
demand for future existence, that demand will 
be supplied. In general, demand was created 
for supply, and supply for demand, and they 
have a strong and unerring affinity for each 
other. A vacuum is a demand for air, and cold 
for heat. Man's natural constitution has many 
demands, and these are supplied when it is in 
a normal condition. 

Applying these principles more specifically, 
let us take the problem of meeting the food 
demands of a great city like London or New 
York. Supplies of just the required amount 



SUPPLY AND DEMAND. 25 

and variety are forthcoming from every quarter 
of the globe, and all without any system, de- 
sign, or forethought. The Chinaman is gather- 
ing the tea, the Brazilian the coffee, the Dakota 
farmer is raising the wheat ; and every other 
quarter and country of the globe is working and 
striving to make up the supply to fit this de- 
mand. It does fit it as perfectly as if it were 
regulated by a pair of colossal balances. The 
element of price comes in and smooths off all 
the inequalities, so that the two surfaces come 
together as perfectly as though polished for the 
purpose. If a temporary, or even expected 
surplus of any article occurs, the price drops 
just enough to increase the demand to the point 
of perfect equilibrium. If there is a tempo- 
rary or foreseen future deficiency, the price 
rises, and the inevitable equilibrium is restored 
as before. It is the element of price that al- 
ways determines the point at which that is 
reached, and price is modified by still another 
element, which is competition. In the event of 
a tendency toward excess, competition takes 
place among sellers; and, on the other hand, 
a predominance of demand causes competition 
among buyers. AH commercial transactions 
•and prices, not only of material products, but 
of everything that bears price, like rate- of 



26 NATURAL LAW IN THE BUSINESS WORLD. 

interest, rents, salaries, brain work, as well as 
muscle work, are so regulated. The salary of 
the clergyman, the fees of the lawyer, and rates 
of transportation, as well as the rate of wages 
for manual labor, are all controlled by this law. 
A high order of talent brings a high price from 
its scarcity. Price is a relative and not an 
abstract quantity. Competition among buyers 
may cause strawberries to bring a dollar a quart 
in April, and among sellers may bring them 
down to ten cents in June. They were rela- 
tively as cheap at the one time as at the other, 
the price at which supply and demand became 
equal varying by so much in the different 
months. 

These laws are elastic and beneficent, and 
they adapt themselves to all conditions in a nat- 
ural and easy way, if allowed to run smoothly 
and without interference. Not that they will 
do away with all the ills of society, or give 
to every man employment at good wages, or 
always give success in business, for all these 
drawbacks are incidental to human fallibility 
and imperfection. The efiect, however, of any 
attempt to put any forced or artificial laws in 
their place is to increase the friction and diffi- 
culties tenfold. It always reacts, and is harm- 
ful to those who mistakenly hoped for benefit. 



SUPPLY AND DEMAND. 27 

A few illustrations : Legislative interference in 
trying to fix rates of interest (or, rather, one 
might say, to take away the freedom of indi- 
vidual contract), in the different States, is now 
generally admitted to be worse than useless, 
although years ago it was regarded as neces- 
sary. The effort to substitute artificial rates 
for natural ones, under penalty, not only did 
not accomplish the purpose intended, but act- 
ually made interest dearer, by obstructing sup- 
plies, injuring confidence, and by natural re- 
action. When the peculiar conditions in any 
State made money really worth more than the 
maximum legal rate, the practical rate would 
be still further enhanced, to equal the risk of 
penalty incurred by the lender. Both parties 
would also feel that they did no moral wrong 
by evading a statute which interfered with the 
first principles of personal freedom. So gener- 
ally has this view of the case come to prevail, 
that this form of legislative interference with 
Natural Law is practically a dead letter, 
though in some States the ill-advised statutes 
are still nominally in force. Legislative inter- 
ference with rates of transportation, and with 
passenger, telegraph, and telephone service, 
is in the same line, and in the long run will 
be found to produce similar results. Aside 



28 NATURAL LAW IN THE BUSINESS WORLD. 

from legislative interference (which will be more 
fully considered in the chapter on Economic 
Legislation), the most formidable attempts 
to force artificial prices occur in the cases of 
railway pools or combinations, speculative cor- 
ners in food products and coal, and in labor 
unions. The results of these efforts are in the 
main unsuccessful, and in any case but tem- 
porary, and they, of course, lack the moral 
dignity of legislative interference. In the 
case of railway combinations, statistics show 
that in all instances where pool rates were put 
at a point much above that which may be re- 
garded as the normal, they have been very 
short-lived. Such a variety of disintegrating 
and competitive influences come in, that even 
the most binding agreements to maintain arti- 
ficial rates soon have to yield. In the case of 
speculative combinations and corners, or efforts 
to control market prices, it may be admitted 
that in a few cases they have been apparently 
successful, but in a vastly greater number they 
have not succeeded, and often they have ruined 
their projectors. In the successful cases, 
where one clique of operators have succeeded 
in cornering the market, or in establishing arti- 
ficial prices, it has been in consequence of 
another clique selling or agreeing to sell what 



SUPPLY AND DEMAND. 20 

they did not possess (in common parlance of 
the commercial world called short selling), 
which is in itself an abnormal condition. Any 
effort to artificially advance prices against nat- 
ural consumption alone is rarely attempted, for 
to have any chance for success there must be 
the opposing clique of "short sellers,'' or 
those who are trying to artificially depress the 
market. Even with the large amount of "short 
selling," attempts to corner the market are 
becoming more and more infrequent, owing 
to the increased rapidity of transportation and 
communication, which has a strong equalizing 
tendency. Wherever such combinations have 
temporarily succeeded, the result has been 
brought about by peculiar conditions, and in a 
forcible manner, before Natural Law had time 
to assert itself. It was like lifting a heavy 
weight in spite of gravitation. 

There is much popular misapprehension on 
this subject. We often see newspaper head- 
lines like the following: "The West is holding 
back its grain," or "Chicago speculators are 
trying to force up the foreign markets," or 
"Wall Street has combined to get up a boom," 
and many other similar announcements, in- 
stances of which might be multiplied. The 
idea, that the millions of tanners in the West, 



30 NATURAL LAW IN THE BUSINESS WORLD. 

or that the thousands of operators in Chicago 
or Wall Street, could come to any general 
understanding in regard to a uniform policy is 
absurd. Instead of any such condition of unity 
ever existing, there are always two parties, 
known in common parlance as " bulls " and 
w bears," each of which is a balance to the other, 
like the two elements under consideration. The 
bears represent the principle of supply, and the 
bulls that of demand; and, as elsewhere, the 
higher or lower prices determine the point of 
equilibrium between them. So far from com- 
bination, not only each party, but every indi- 
vidual in each party, is trying to excel all 
others in making the most correct estimate of 
the natural drift and tendency of existing con- 
ditions, and how to profit thereby. 

Of attempted forced artificial prices fcr labor 
by labor unions, we shall speak more fully in 
another chapter, but in passing will suggest 
that the uniform dominion of these principles 
does not abruptly terminate here, as some of 
the sentimental theorists maintain. They are 
obliged to assume that it does make an excep- 
tion in this spot, in order to save their system. 
No matter how much we might wish it other- 
wise, facts are opposed. Not only that, but 
upon closer study we shall find that the labor- 



SUPPLY AND DEMAND. 31 

ing man is as much concerned in the integrity 
of these laws, even if he had the power to 
modify them, as any other part of society. As 
we have before noticed, the prices of brain 
labor are regulated by these two elements, and 
it would be a violation of all analogy to claim 
any exception in the case of muscle. He who 
tries to sow the seeds of discontent in the minds 
of laboring men by teaching such a theory, is 
not their true friend. He may be actuated by 
an honest, though misguided sympathy, but it 
is none the less harmful to the laborer, and 
tends directly to degrade his manliness and in- 
dependence. Those sentimentalists who expect 
the laboring man will be benefited by force of 
combination (as though he were going into a 
combat) are on the wrong track. Societies of 
laboring men might be organized for social, in- 
tellectual, and moral purposes, and be produc- 
tive of great good; but when, as at present, 
they arc constituted for the sole purpose o{ 
forcing artificial prices, they injure not only the 
laborer himself, but they are harmful to busi- 
ness and confidence, and an injury to society at 
large. A seller of labor, or any other com- 
modity, is dependent on demand, and demand 
cannot be coerced, Whenever thai i> at- 
tempted, it shrinks back, ft is like picking a 



32 NATURAL LAW IN TEE BUSINESS WORLD. 

quarrel with the' only friend that can help us. 
It would be a poor way to induce a horse to 
drink, to force his head under water. 

Demand can be stimulated, courted, and in- 
creased by the adoption of such a policy as will 
promote peaceful conditions, and inspire confi- 
dence, present and future. Wages will then 
rise naturally from increased demand. Under 
such conditions, every employer would want to 
enlarge his capacity, and as a buyer of labor 
would have to offer higher prices to get it. 
The almost or quite one hundred per cent ad- 
vance in average wages which has been made 
during the last thirty years, in spite of the 
immense immigration into the country, is a 
natural advance, and was caused by an excess of 
demand. If the forcing process had been con- 
tinually applied during that period, the advance 
would have been much less marked, for the 
reason that the demand would have been in- 
jured. As we have already seen that supply 
and demand are always equal, it follows that an 
injury to the one is harmful to both. It may be 
objected that in the case of factory towns and 
cities, the immobility of labor would prevent 
in some degree the right adjustment of wages - 
by the law of supply and demand. This 
sounds rather plausible, but, in the first place, 



SUPPLY AND DEMAND. 33 

there is no other adjustment possible ; there- 
fore, we have no choice. In the next place, 
the practical immobility is never so great, but 
that in the event of any forced or continued 
attempt to impose artificially low prices upon 
labor by employers, a gradual but sure process 
of recovery would at once begin, and would not 
rest until the normal rate was approximated. 
The emigration from such a factory or town 
might be slow, but it would be continuous, 
until the inevitable equilibrium was reached. 
It would be no compliment to the intelligence 
and manliness of laboring men to assert to the 
contrary. The real self-interest of the em- 
ployer would also become a factor, for the 
emigration would be from his most intelligent 
and desirable class of help. 

In general, demand has grown from the few 
and simple cravings of primitive man for mere 
food and shelter, and these of the simplest 
character, up to the infinite and wonderfully 
complex variety of desire that characterizes 
modern civilization, and supply has paralleled 
iis track for the entire distance. This equal 
progress and enlargement o( supply ami demand 
will continue in the future, and no one can tix 
its limits. 
S 



LABOR, LABORERS, AND PRODUCTION. 



" He that by the plough would thrive 
Himself must either hold or drive." 

" Man goeth forth unto his work and to his labor until the 
evening." 

Ps. civ. 23. 

" On bravely through the sunshine and the showers, 
Time hath his work to do and we have ours." 

Emerson. 



m. 

LABOR, LABORERS, AND PRODUCTION. 

T ABO'R is normal ; idleness, abnormal. The 
-^ physical, mental, and moral faculties of 
man were created for use and exercise, and it 
is only by their active training that they attain 
skill, efficiency, and excellence. That the act- 
ive employment of the gifts and capabilities 
of man's nature was designed by the Creator is 
abundantly proved, both by analogy and expe- 
rience. As all human happiness and perfection 
are reached in the line of conformity to law, so 
a non-conformity brings misery and unhappi- 
ness. Labor is a blessing, and idleness a curse. 
Human powers must have occupation, or else 
they become weakened, withered, and out o( 
harmony. As mankind is at present consti- 
tuted, it were better to give him the barren and 
sterile soil bringing forth weeds and thistles, to 
be transformed by the healthful activity of his 
energy into blooming gardens and fruitful fields, 
than to supply him with all these delightful 
and useful objects spontaneously, and without 
efforl and toil on his part. 



38 NATURAL LAW IN THE BUSINESS' WORLD. 

The world is full of things to be done, and 
labor is, therefore, the most staple of all com- 
modities. The mistake of thinking that the 
hands alone perform labor is a very common 
one, when the fact is, that every part and 
power of the body and mind can and does labor 
and toil, and only by this activity can it fulfil 
its function. Under primitive conditions, there 
was a general activity of body and mind, rather 
than a special development in any one direc- 
tion. The barbarian was his own tailor, car- 
penter, jeweller, farmer, and common carrier, 
and his products were few and poor. Under 
modern conditions, activity is more subdi- 
vided, and education more thorough. Thus, 
we have farmers, carpenters, painters, engrav- 
ers, masons, and numberless other trades and 
professions, each one of whom has special 
education, and as a result, superiority. Each 
therefore does not only his own particular kind 
of work for himself, but for all the others, be- 
cause his production is far more perfect. So in 
the department of brain labor, the clergyman, 
physician, lawyer, banker, scientist, historian, 
and statesman have all cultivated their powers in 
their several fields to a high state of efficiency, 
and each has his place in the rounding out and 
completing of the grand unit called society. In 



LABOR, LABORERS, AND PRODUCTION. 39 

this consists the great superiority of the mod- 
ern state, with its high degree of civilization, 
over the barbarous governments and peoples of 
primitive times and conditions. 

The scientist, historian, and bookkeeper are 
as truly laborers and producers as he who 
handles a pick, plough, or loom. The popular 
use of the term "labor" as applied only to those 
who exercise muscle, is therefore erroneous. 
The brakeman in the employment of a railway 
company may, by industry, energy, and abil- 
ity, rise to be its president, but he is no le>- a 
laborer than before, and as a man, not neces- 
sarily any more worthy or noble. 

While a normal amount of labor is in accord 
with law, and is necessary to healthful and har- 
monious development, an excess of exertion is 
harmful. It is also obvious to any close ob- 
server that, of the two, an exct^ss of mental 
labor is more wearing and disastrous in its re- 
sults on the health and constitution than is too 
much physical exertion. The care, worry, ami 
responsibility incidental to menial occupations 
cause vast numbers to break down in health ; 
and here again the popular idea is at fault 
that connects all hardship and suffering with 
only manual occupations. While therefore our 
sympathy may go out towards the laborer who 



40 NATURAL LAW IN THE BUSINESS WORLD. 

uses a shovel for eight or ten hours in a day, 
we should not entirely overlook the weary 
bookkeeper or clerk, who often works twelve 
or fourteen hours, amidst unwholesome con- 
ditions and impure air. The sleep of the man 
who labors with muscle is sweeter, his diges- 
tion more sure, and his vigor greater than that 
of the average brain laborer. The idea that 
manual labor is in itself degrading, and to be 
avoided as far as is possible, is the delusion of 
the present time. 

The ideal man would be he whose physical, 
mental, and moral powers are all well rounded 
out, cultivated, and harmoniously balanced. 
Idleness is a violation of Natural Law, and its 
companions in transgression are improvidence, 
degradation, intemperance, and decay. By in- 
exorable law and logic, each positive virtue has 
its corresponding opposite condition of vice and 
error. 

As to the different varieties of labor, it may 
be said that all are indispensable, the mental as 
well as the physical, each in its proper sphere. 
The steam in the locomotive is a more subtle 
and refined factor than the boiler and wheels, 
but no less necessary and important. So the 
brain worker, though in a more delicate, re- 
fined, and nominally higher sphere, is only a 



LABOR, LABORERS, ANT) PRODUCTION. 41 

component part of a general system, but in 
personality is not necessarily above his fellow- 
laborer. The test of excellency of a wheel in a 
machine is that it fills well its peculiar place 
and office. There is no natural aristocracy of 
the mental laborer over the physical that is 
based upon his greater necessity to society, 
for Natural Law is not sentimental, but thor- 
oughly democratic. 

Having found that labor is natural, necessary, 
and in harmony with man's constitution, let us 
consider its object. In the economy of Nat- 
ural Law, means are always in order to an end. 
Labor is the means; production, the result or 
object. The finished building is as much the 
product of the architect as of the carpenter or 
mason ; or, rather, it is the joint product of 
both. In the distinction made between mental 
and manual labor, it is evident that only the 
predominant element is referred to, lor neither 
can be strictly pure. The simplest manual task 
must be accompanied by a mental process ; 
and likewise, the scholar or scientist must do 
some physical labor with pen ov apparatus. 

Production is only a general term for Food, 
clothing, home, education, surplus. These con- 
stitute wealth, which is only another name for 
accumulated labor. The wages paid tor labor 



42 NATURAL LAW IN THE BUSINESS WOULD. 

are rather the above-named objects, than any 
certain sum of money, for the value of money 
consists only in the products that it will com- 
mand. The natural aim and object then of the 
laborer is to increase the result produced by his 
labor. How can this be done ? First, person- 
ally, or by a greater activity and industry, and 
by the cultivation of individual qualities which 
tend to success. Second, by surrounding him- 
self with more favorable environment and con- 
ditions. It is not only in accord with Natural 
Law, but with common-sense, that individual 
energy and ambition and persistent training in 
a particular department are necessary for much 
progress in any line of, effort. The question 
with the wage-worker must not be, how few 
hours or how little exertion can I possibly 
get along with? but rather, how much can I 
accomplish? He who puts forth his best 
efforts will soon become indispensable to his 
employer, and his labor will naturally rise 
in value, and he. will soon by positive devel- 
opment step into the ranks of the employer 
himself. 

Society is composed of two classes, the in- 
dependent and the dependent. The question 
as to which of these two classes a man will 
belong is, under all ordinary conditions, a 



LABOR, LABORERS, AND PRODUCTION. 43 

matter of individual choice. The road to in- 
dependence is open, and finger-boards are up 
on every corner. Here is seen one of the bad 
effects on the laborer of labor unions. Instead 
of relying upon individual merit and energy for 
maintaining or advancing his wages, he relies 
upon the power of the union. The former is 
natural ; the latter, artificial. By this course 
he loses his motive for the attainment of 
personal superiority and natural advancement, 
and settles down to the dead level of the 
dependent elements that surround and control 
him. 

The goal of the American laborer is the posi- 
tion of accumulated labor, or, in other words, 
that of capitalist. A continuous, even if a 
small margin between income and expenditure 
in one direction fixes the condition of inde- 
pendence, and, in the other, of its necessary 
opposite. It is not a matter of chance, but of 
law. In this country, even if a laborer begins 
in the dependent ranks, his condition is not a 
fixed one. The transition to the independent 
class is easy and plain, when the natural course 
of individual merit and effort is chosen. Ex- 
amples on every hand prove that this is univer- 
sal experience, and is not a matter of sentiment 
or theory. But a very small part of the wealth 



44 NATURAL LAW IN THE BUSINESS WORLD. 

of this country was inherited, probably nine 
tenths being the result of personal labor. Any 
short-cut route to success is very uncertain, 
and any forced march, outside of the natural 
conditions of progress, or under a dictator, is 
generally disastrous. But the broad, direct, 
and solid highway of individual industry, econ- 
omy, and temperance is always open. A sur- 
plus is what the daily wage-worker should be 
accumulating, and presently it supplements his 
personal force with power of another kind. 
For such a man to try to antagonize accumu- 
lated labor, or those who possess it, is to oppose 
the very principles and conditions which are 
his own hope and reward. 

The young American wage-worker who puts 
forth his best efforts, and who practises what 
economists call abstinence, or the limiting of 
expenditure to less than income, has as good 
ground for expecting to become a capitalist as 
has the gardener to expect a crop from good 
seed deposited in a rich and fertile soil. It is 
no less true that he who does as little as will 
possibly keep him in his position, and who has 
little regard for the interests of his employer, 
has the elements in him that make it almost 
certain that he will always, be a member of the 
dependent class. 



LABOR, LABORERS, AND PRODUCTION. 45 

In regard to means favorable to increased 
production by labor which are external to the 
laborer, two general conditions may be men- 
tioned : first, by increasing the efficiency of 
mechanical appliances and aids ; and second, by 
seeking a favorable location or propitious field 
for operations. As to the first, it is not long 
since that labor-saving machines were looked 
upon as the enemy of the laboring man, and 
some of the most useful inventions were forci- 
bly destroyed, and their owners persecuted. 
Even as recently as thirty or forty years ago, 
the opinion was quite prevalent in the rural dis- 
tricts of New England that the general advent 
of railroads would quite destroy the value of 
both horses and oats. It was found later that 
the world needed them both, and the result 
was just the opposite of what the farmers had 
expected. 

When the printing press was first brought 
into use, it was found that with it one man 
could do the work of two hundred copyists, 
and, as a consequence, it was feared thai one 
hundred and ninety-nine men would be thrown 
out of employment. But notice- the result. 
Soon the superiority of printed books over 
those that were written, together with the 
lower price, stimulated authorship aiul in- 



46 NATURAL LAW IN THE BUSINESS WORLD. 

creased the sale and use of books a thousand- 
fold, and employment was given to more print- 
ers than there were copyists before. Besides 
this direct result, there were in addition the 
related occupations of paper makers, book- 
binders, book sellers, and various others, so 
that the final result was the employment of 
many times the number of persons that seem- 
ingly lost their occupation at the time the in- 
vention came into practical use. And this, as 
a result, merely of an economic process, aside 
from the immense impetus given by it to 
human learning, art, and knowledge. It may 
be regarded as in accordance with Natural Law 
that every new invention and improvement that 
saves manual labor, and adds to the comfort 
and convenience of mankind, at the same time 
increases and opens up new avenues of employ- 
ment, so that, as in the instance just given, it 
gives occupation to greater numbers of opera- 
tives than were before required. Every such 
new improvement increases the production, the 
varieties of occupation, and also raises the 
grade of employment. The engineer who runs 
a locomotive is in a higher grade of occupation 
than he who wields a pick, for the reason that 
there is more of the intellectual element in it. 
The higher grade is in the occupation, for the 



LABOR, LABORERS, AND PRODUCTION. 47 



man that uses the pick is not necessarily lower 
as a man. 

In general, therefore, with the progress of 
science and invention, mind has more and more 
asserted its supremacy over matter, and the 
physical exertion of the laborer has been mixed 
and tempered in an increasing degree with the 
intellectual. As man becomes better acquainted 
with Natural Law, he gains in his supremacy 
and command of the material elements around 
him, and makes them minister to his complex 
needs and desires. All this is to the special 
advantage and benefit of the manual laborer. 
In consequence of this, the humble cottager of 
to-day has more of comfort and even luxury 
than the king in his palace could have enjoyed 
three hundred years ago. It is said that Queen 
Elizabeth wore the first pair of knit stockings 
ever brought to England, and they were re- 
garded as a great luxury, while now even a 
beggar could hardly be found without them. 
The introduction and use of the telegraph, 
telephone, and other electrical appliances afford 
examples of the conveniences now enjoyed by 
all classes. These, at the same time, open up 
immense fields and new avenues for human en- 
ergy and employment. As before suggested, 
labor becomes more efficient in production by 



48 NATURAL LAW IN THE BUSINESS WORLD. 

subdivision. The Jack-at-all-trades style of 
production belongs to a past age, but the pres- 
ent tendency is towards perfection of detail, 
by means of thorough organization and sub- 
division. 

The law of progress is in the line of each 
member of society doing the particular thing 
that he can do best, and leaving everything else 
alone. This natural principle is being more 
widely utilized than ever before, and, as a 
result, no past age can be compared with the 
present in respect to ease, quantity, and quality 
of production. 

Our own country, without doubt, presents a 
field of operation where the greatest possible 
production can be had for a given amount of 
labor. The American youth have before them 
the most promising opportunities that have 
ever been enjoyed in any age or country. 
They are indebted for this, not only to the fact 
that they have command of all the accumulated 
skill, knowledge, and experience of their prede- 
cessors, but that all their natural rights and 
privileges are secured to them by the beneficent 
care and protection of our free government. 
They start in the race without any of the im- 
pediments that pertain to less democratic con- 
ditions. In the Old World, the fixedness of 



LABOR, LABORERS, AND PRODUCTION. 49 

class, rank, and position, together with systems 
of entail, compulsory military service, and 
many other influences which are artificial in 
their character, are dead-weights, and in oppo- 
sition to the free exercise of Natural Law. 



LABOR COMBINATIONS AND THEIR EFFECT ON 
THE LABORER. 



" Every tub must stand on its own bottom." 
" The truth shall make you free." 



John vizi. 32. 



1 1 They made and recorded a sort of institute and digest of 

anarchy ', called the Bights of Man " 

Burke. 



IV- 

LABOR COMBINATIONS AND THEIK 
EFFECT ON THE LABORER. 

TN examining the claims of labor organizations, 
A let it be understood that we take them as 
they are, and not as they might be. It is 
freely admitted that societies of working men 
might be formed for purposes that would be 
highly beneficial and praiseworthy. Reading 
and literary organizations, lyceums for debate, 
societies for the promotion of temperance and 
morals, scientific and trade associations having 
for their object the increase of technical knowl- 
edge in the various occupations and professions, 
— all these, and others that might be named, 
would be of the greatest advantage and benefit 
to working men. But labor combinations as 
they exist give little or no attention to these 
grand possibilities . 

Their entire action and effort is in the direc- 
tion of vainly trying to combat the natural 
principle of supply and demand. 

Let us look at this matter in detail. Why 
are these combinations an injury to working 
men? 



54 NATURAL LAW IN THE BUSINESS WORLD. 

First. Because their foundation and main- 
spring is the idea of antagonism to capital, or 
accumulated labor. 

Second. Because their influence is against 
the exercise of individual merit, industry, and 
excellence, and distinctly in the direction of 
dependency. 

Third. Personal freedom of action and con- 
tract is surrendered to the control of others, 
whose judgment is often faulty and prejudiced. 

Fourth. They are tyrannical in their action 
toward all unorganized laborers. 

Fifth. Their logical tendency and influence 
is in the general direction of socialism. 

Let us examine these points in order as 
above mentioned. 

First. Their foundation and main-spring is 
the idea of antagonism to capital, or accumu- 
lated labor. 

The idea of the necessary existence of this 
sentimental enmity has been most industriously 
promulgated, and this, combined with a degree 
of jealousy in human nature toward those whom 
we imagine to be better off than ourselves, has 
given popular currency to this feeling. It has 
become such a habit to speak of the " interest 
of labor," and of the " interest of capital," assum- 
ing that each is opposed to the other, that we 



LABOR COMBINATIONS. 55 



adopt the practice without thinking of its utter 
fallacy and absurdity. The fact is, there is no 
natural antagonism, because both are mutual 
allies and necessary helps to each other. When 
one suffers, both suffer ; and when one is pros- 
perous, both are. There is no more sense in 
a quarrel between them than there would be 
between the right and left hands, or between 
two wheels of the same machine. To ta'k 
about a conflict between them is a pure inven- 
tion. As well talk about a quarrel between 
brick laying and commerce, or industry and 
banking. Persons may disagree, but occupa- 
tions, conditions, and truths, never; for they 
are all parts of one natural and harmonious 
whole. 

There are many leaders, organizers, agitators, 
and politicians whose interests lie directly in 
the line of keeping up this harmful and expen- 
sive fallacy. The machinery of labor organiza- 
tions gives them many opportunities to gratify 
ambition, love of notoriety, sense of power and 
authority, or to seek financial benefit and politi- 
cal capital. We wish to be perfectly fair and 
just to gentlemen occupying official positions in 
the Knights of Labor and kindred organizations, 
and make no charge that any are influenced by 
the considerations just named. We are dis- 



56 NATURAL LAW IN THE BUSINESS WORLD. 

cussing principles, and not men. No doubt 
many are interested in this work who are con- 
scientious, and who sincerely feel that they are 
doing the cause of labor a great good. Here 
comes in a principle before mentioned. With 
one error for a basis, a whole group of allied 
errors have to be evolved to harmonize with it 
in order to form a system. Assuming that 
capital and labor are enemies, and not allies, 
the logical result would be combination, offen- 
sive and defensive, with close ranks, thorough 
discipline, and perfect equipment for warfare. 

If there were no capitalists, there would be no 
factories, mills, railroads, machinery, or wages. 
How can capital be our enemy when its absence 
from society would throw us back into a state 
of barbarism? Without it, we could not travel 
by rail or by sea, or have anything to wear, 
except what we made with our own hands. Its 
enterprise enlarges the field of operations, in- 
creases the demand for labor, and enhances its 
market value. 

The sentimental theorists who have written 
on political economy ought to see that their 
teachings are contrary to the eternal principles 
of* economic science ; but the difficulty seems 
to be that their business education has been 
entirely theoretical. It would be an interest- 



LABOR COMBINATIONS. 57 

ing experiment if some of these writers on 
"Labor Problems" would embark in real busi- 
ness. Let one take the management of a large 
manufacturing corporation, another the control 
of some railroad system, and a third assume 
the direction of affairs in a large importing or 
jobbing house. If consistent, they should con- 
duct these various kinds of business on the 
sentimental basis. In hiring their help, they 
should not be governed by the market price of 
labor, but should pay inefficient men the same 
as those of the best grade, provided they had 
as large families, or rather, perhaps, the price 
fixed by the local "district organization." 
They should pay ten hours' wages for eight 
hours' work, and employ none but union men, 
even if others should starve. The mercantile 
manager should handle nothing but union goods, 
even if just as good non-union articles could 
be had for ten per cent less. The railroad 
manager should have no locomotives on his 
road, unless they were made in every part by 
union hands ; and if his switchmen struck, he 
should not hire any other good men that applied 
for work at the market price. He should grant 
the terms asked by the strikers, and take them 
back, even if he knew that they would strike 
again the next day. If he wished to change 



58 NATURAL LAW IN THE BUSINESS WORLD. 

his rules, hours, or methods, he should first get 
permission from the nearest "member of the 
executive board," whether that official knew 
anything of the nature of the business or not ; 
and his negotiations should be entirely with 
this official, and not with the men themselves. 
It is very probable that in each of the supposed 
cases a year's trial of sentimental management 
would be ample to satisfy the respective stock- 
holders in regard to its merits, as compared 
with real business methods. It is one thing to 
assume business conditions, suited to a theoreti- 
cal treatise, and quite another to act under 
those conditions in real life. The cases sup- 
posed would be only putting in practice the 
every-day claims and theories of labor organi- 
zations. Suppose that the commerce of cities 
and nations was conducted on this basis as an 
experiment. We can imagine that it would not 
long continue before both laborer and employer 
would cry out for another Adam Smith, to 
lead us back to the solid ground of natural 
principles. 

The prejudice of the wage-worker has been 
wrought upon until he has been made to feel 
that it is necessary for him to go into a strong 
combination for his own safety and protection. 
Capital has been personified before him as an 



LABOR COMBINATIONS. 59 

unscrupulous, overbearing, and rich opponent, 
who is doing his utmost to crush and degrade 
him, and with such a picture before him his 
antagonism is naturally aroused. Such im- 
pressions are mischievous and harmful to the 
best interests of both parties. 

Second. Their influence is against the 
exercise of individual merit, industry, and 
excellence, and distinctly in the direction of 
dependency. 

It is almost self-evident, that when a man 
depends upon the organization of which he is a 
member to maintain or advance his wages, 
rather than on his own individual merits, he is 
on the downward road toward dependency. 

Good honest muscle, skill, and energy are 
the most staple of all commodities, and they 
will rarely fail to find a good market on their 
own merits. This is especially true of every 
man who is conscientious in regard to the in- 
terest of his employer. It seems to be the aim 
of labor organizations to make the laborer as 
inefficient and impotent as possible. It is a 
levelling process, and any special energy or 
enterprise is discountenanced. A man who 
displays these qualities is on the road to inde- 
pendence ; therefore, he receives no encourage- 
ment. It is assumed that labor is a curse, and 



60 NATURAL LAW IN THE BUSINESS WORLD. 

the less of it that one can get along with, the 
better. The theory is, that with fewer hours, 
or a smaller amount accomplished, the more 
room will be left for the employment of others 
of the organization. It requires but a glance at 
these well-defined tendencies to see that they 
do not conduce to the formation of any type of 
character that is manly or self-reliant. The 
sentimentality of the times that looks upon the 
working man as a poor, oppressed, down- 
trodden being, is absurd when applied to an 
American laborer, and his self-respect ought to 
rebel against any such assumption. 

The theory that wages are worth such a 
sum, regardless of the market, is not sound; 
and every workman of any intelligence ought 
to be able to see it. There is no other possi- 
ble conclusion in harmony with Natural Law, 
but that a thing is worth what it will bring in 
a free and untrammelled market. The benev- 
olent idea that wages should yield a fair sup- 
port has no application in the business world. 
Charity is the highest and brightest of all 
virtues in its proper sphere ; but its province 
is not in fixing market prices. The charitable 
idea would not harmonize with the dignity of 
labor, and every intelligent and self-respecting 
laborer would scorn the sentiment that he is a 



LAB OB COMBINATIONS. 61 

pauper or semi-pauper, or that he ought to 
receive what he had not fairly earned. No ; the 
average working man of America is well able 
to take care of himself, and is not so imbecile 
as to require guardianship. It is for him to 
decide whether it is for his interest to accept 
an offer for his services, or to look further for 
a better market. He is a man ; and, as such, 
should do business upon business principles. 
As a man, he should strive to escape a con- 
dition of dependence, and to become an inde- 
pendent member of society. 

Third. Personal freedom of action and con- 
tract is surrendered to the control of others, 
w T hose judgment is often faulty and prejudiced. 

The question comes to every intelligent 
workman : Can I afford to surrender my per- 
sonal liberty, freedom of choice, duties to my- 
self, family, and conscience, to any secret and 
irresponsible tribunal? Can I consent to be 
ordered "out" or " in," regardless of my per- 
sonal wishes, in a land where personal liberty 
of action is the distinguishing characteristic ? 

With perhaps the exception of the society 
known as the "Brotherhood of Locomotive 
Engineers," which is more especially a benev- 
olent organization, the system of strikes seems 
to be an important element in the working 



62 NATURAL LAW IN THE BUSINESS WORLD. 

policy of labor combinations. Strikes are vio- 
lent efforts to defy Natural Law, and are, 
therefore, harmful and expensive. Even when 
apparently successful, it will be found that their 
influence, in the long run, is not advantageous. 
The most conservative and moderate estimate 
of the direct loss to the laboring men of the 
United States, caused by the strikes of the year 
1886, would mount high up in the millions, 
and their indirect results, if their influences 
could all be traced out, would be found to be 
even greater. The discharge of a single union 
man, or the retention of a single non-unionist, 
has been made the excuse for a strike involving 
thousands, with all its attendant suffering and 
expense. All this to vindicate a supposed prin- 
ciple, which really turns out to be only a senti- 
mental w boomerang." Such was the nature of 
the very extensive and disastrous strike which 
took place in the spring of 1886, on what is 
known as the Gould system of railroads, ex- 
tending from St. Louis to Texas. Thousands 
of men, many of whom had families depending 
upon their daily earnings, were "ordered out" 
of good situations, which they never afterwards 
regained. Thousands of others,, whose busi- 
ness was more or less directly connected with 
these men, were thrown out of employment, 



LABOR COMBINATIONS. 63 

and business of all kinds was largely inter- 
rupted for weeks in three or four States, caus- 
ing great loss to all classes. Much property 
was destroyed, and many non-union workers 
were injured and maltreated. All these, and 
other ills too numerous to be mentioned in de- 
tail, resulted from the ill-advised and cruel 
orders given to confiding working men by labor 
officials. It seems to be a fact beyond doubt, 
that what would have been a great and general 
resumption of prosperity in the business of the 
whole country, which had begun to set in 
strongly in the early spring of 1886, was not 
only postponed, but almost destroyed, by the 
labor disturbances which came like an epidemic 
in April and May of that year. And further- 
more, these troubles did not appear to be spon- 
taneous in their character, but they were " or- 
dered," engineered, and fomented by agitators, 
who did not belong in the ranks of the work- 
ing men. If things had remained in their nor- 
mal and peaceful condition, so that the era of 
general prosperity had really got under way, 
the increased demand for labor would have 
caused a natural advance in wages, as has 
always been the case, and general prosperity 
so long desired would have come to remain. 
One more example of w killing the goose that 



64 NATURAL LAW IN THE BUSINESS WORLD. 

lays the golden egg." Natural Law is a most 
powerful and serviceable friend, but if we will 
persist in making it our enemy, we must reap 
the consequences. The disastrous effects of 
the gigantic labor disturbances in Chicago, 
during April and May, 1886, are still fresh in 
mind. The general suspension of business, 
and the disorganized condition of things in 
that city, gave the Anarchists their long-looked- 
for opportunity to begin their warfare on soci- 
ety. To the great credit of laboring men, they, 
as a rule, condemn many things that are pro- 
posed to be done in their name. The Anar- 
chists, and other enemies of society in general, 
are not found to any extent among laboring 
men. They despise labor and the laboring 
man, but at the same time try to make him 
their tool. One or two more instances of the 
effect of strikes will suffice, for they are all 
very uniform in their results. In July, 1886, 
a large number of tanners, employed in the 
extensive establishments of Salem and Pea- 
body, Mass., were "ordered out." In the end,, 
most of the men lost their places, and had to 
remove elsewhere to find work. During sev- 
eral months, assaults, intimidation, and disorder 
continued more or less, and the towns were put 
to large extra expense to protect; as well as 



LABOR COMBINATIONS. 65 

possible, those who wished to work. The in- 
direct losses and suffering growing out of this 
strike can never be estimated. The Peabody 
Reporter made a very careful estimate of the 
direct results on Nov. 10, 1886. A personal 
canvass of all the shops of Salem and Peabody 
was made, and every detail carefully ascer- 
tained. It gives the result as follows : — 

"On July 12, 1,500 men left work in forty- 
three factories, and on November 10 there 
were employed in these same factories 1,205 
men. In the other thirty-one factories, 613 
men went out at the same time, and in these 
factories 509 men are now at work. This 
makes a total of 2,113 men who quit work 
July 12, and a total of 1,714 men employed 
in the same factories to-day. Had these men 
worked, they would have received $456,408. 
It is estimated that they have lost, aside from 
the amount received from the Knights of Labor, 
$304,272." 

As a result of the eight-hour agitation dur- 
ing the spring and summer of 1886, the pork 
and beef packers of Chicago gave that system 
a continued and thorough trial. As competing 
cities continued on the ten-hour basis, the inev- 
itable result soon became apparent. The busi- 
ness could be done more cheaply at those 
places, and, as Natural Law is inexorable, the 

5 



66 NATURAL LAW IN THE BUSINESS WORLD. 

business was rapidly transferred to them. The 
Chicago packers, finding it useless to hold out 
against the inevitable, notified their help early 
in November that they would be obliged to 
return to the ten-hour system. Rather than 
accede to this, nearly twenty thousand men 
were "ordered out"; this, just at the begin- 
ning of winter, when the great majority had 
nothing ahead, and thousands of them had fam- 
ilies dependent for subsistence on their daily 
labor. The hostile presence of such a mass 
made it utterly unsafe and impracticable for any 
minority to continue at work. The very few 
that attempted to do so found that their lives 
and homes were in imminent danger. Plenty 
of non-union men, who wanted to work, could 
only be protected by the use of two regiments 
of infantry, sent at the expense of the State, in 
addition to large numbers of private police. 
It is true that officials of the Knights of 
Labor discourage violence, but the difficulty is 
with the system. It is a cruel thing to order 
twenty thousand dependent and unintelligent 
laborers out of their positions at the beginning 
of winter. It is folly to expect that they will 
stand idly by and see their places taken by 
others. It is easy to say to them, "Keep 
quiet," but these unfortunate men have a terri- 



LABOR COMBINATIONS. 67 

ble pressure on them, forcing them not to keep 
quiet. 

Let us look for a moment at the ultimate 
effect of a rise in wages, when caused by the 
successful efforts of labor organizations, in a 
quiet manner and without striking. For illus- 
tration : Suppose that the natural and competi- 
tive cost of a certain style of boot is $5.00 
per pair, as produced in Massachusetts man- 
ufacturing towns, and that 100,000 pairs are 
made and sold annually. Now suppose that 
the labor unions in the city of Lynn get 
such a thorough control that by quiet pres- 
sure, the crimper, laster, stitcher, and the 
various other kinds of workmen each estab- 
lish a moderate advance, so that it now makes 
the cost of the boot $5.25, instead of $5.00, 
as before. The combination here have carried 
their point, but let us see if they have made 
any gain. The first effect would be seen in a 
lessened demand. The average man would 
wear his old boots a little longer, or would buy 
some other style in place of them. Instead of 
100,000 pairs, it would be found at the end of 
the year that a less number, say 90,000 pairs, 
had been the limit of demand. Therefore one 
tenth of these workmen have been thrown out 
of employment. Now look at another effect. 



68 NATURAL LAW IN TEE BUSINESS WORLD, 

If in Haverhill, and other competing points, 
natural competition still enables the same boot 
to be produced for $5.00, the business would at 
once begin to leave Lynn ; for, by Natural 
Law, it always seeks the cheapest producing 
points. So that not only the general demand 
would fall off, but competition w T ould soon force 
the Lynn manufacturers to stop entirely the 
production of this boot. Some of the work- 
men of Lynn would have to sacrifice their 
homes, and move elsewhere, and the place 
would run down. Some one may reply that 
by general combination, the advance could be 
obtained at all points in the State. That would 
not in the least affect the first result, which was 
a lessening of the general demand. But, in 
addition, if all the State combined, it would 
tend to drive the business to other States, and 
to the West and other parts of the country. 
This would cause a loss of dollars to the Massa- 
chusetts boot makers, in an attempt to grasp 
dimes. With the levelling influence of world- 
wide competition, such an artificial attempt is 
worse than useless. It is harmful. The prin- 
ciple illustrated in the case of boot manufactur- 
ing is universal in its application, and no kind 
of production is exempt from its irresistible 
control. A man might as well try to lift him- 



LABOR COMBINATIONS. 69 

self by the straps, when wearing one of these 
pairs of boots, as to expect to mount above the 
force of these fundamental business principles, 
or to escape their penalties. 

If it were possible by universal combination 
among working men to advance wages fifty per 
cent, it would not in the least improve their 
condition. The price of everything they need 
would be enhanced in the same proportion, and 
they would have no larger surplus at the end 
of the year than before. 

The system of assessments necessary to keep 
in motion all the machinery of labor organiza- 
tions, including the salaries of officials, together 
with the very large sums necessary to maintain 
in idleness those who are " out," adds still more 
to the burdens of the working man. War is 
always expensive, and this conflict, not with 
employers, but with supply and demand, is a 
costly operation. The promises made by the 
labor agitators seem attractive and desirable, 
but their fruits will be found bitter. It is 
noticeable that vehement champions of the 
labor cause, who have been zealous to have 
the assumed wrongs of the working man righted, 
have, in many cases, soon after been found in 
the field as candidates for some political office. 
In the spring of 1886, the chief officer of the 



70 NATURAL LAW IN THE BUSINESS WORLD. 

Knights of Labor issued a very emphatic warn- 
ing to the members of that organization to keep 
out of politics, suggesting that the success of 
the movement depended upon their following 
the course advised. In a few months from that 
time, however, we find the organization active 
in the political world, and casting a solid vote 
for a socialistic agitator for the mayoralty of 
the leading city of the Union. 

When sentimental socialists try to make the 
working man dissatisfied with his condition, by 
teaching him that labor is a dependent condi- 
tion, and that he is in slavery, the laborer 
should not forget that the average price of 
labor has for many years been steadily advan- 
cing from natural causes. The price of labor is 
now about double what it was thirty or thirty- 
five years ago. On an average, it took double 
the amount of labor to buy a given amount of 
flour, sugar, clothing, and most other necessi- 
ties, that it does at the present time. The sin- 
gle item of rent is probably dearer, but, with 
that exception, nearly everything used by a 
laboring man has declined during the period 
in which wages have doubled. This shows a 
real and great advance in labor values from the 
operation of Natural Law, and would probably 
be still higher than it is at present, had it not been 



LABOR COMBINATIONS. 71 

obstructed and hindered by the active opera- 
tions of labor unions during the last two years. 
In spite of the influence of unrestricted immi- 
gration, the rate of wages with us is, in gen- 
eral, more than double what it is in Europe. 
Everything seems to show that the present 
unrest, now existing among the manual laborers 
of America, is in no degree the result of recent 
changed conditions for the worse ; but that it is 
entirely due to the sickly sentimentalism and 
semi-socialistic doctrines, the seeds of which 
are so persistently sown by foreign agitators, 
and whose theories are so abundantly advertised 
by the sensational portion of the newspaper 
press. The vagaries of the greatest extremists 
thus get a very large amount of notoriety. 

In regard to boycotts, we shall only observe 
that they are unbusinesslike and revengeful in 
their conception, unnatural and un-American in 
their methods, and deranging in their effect on 
all legitimate business. It is a privilege and a 
necessity for the wage-worker who has limited 
means to expend, to buy the best goods at the 
lowest prices possible in a free market, whether 
they were made by union hands or not. To 
pay more for purposes of revenge is a loss to 
the laborer, and an injury to society, of which 
he is a part. 



72 NATURAL LAW IN THE BUSINESS WORLD. 

Fourth. They are tyrannical in their action 
towards all unorganized laborers. 

They assume to represent labor in general, 
but statistics show that but a small part of the 
grand aggregate of laboring men belong to 
organizations. The interests of this great mass 
of unorganized men are, to a great extent, 
ignored by the public and despised by the com- 
binations. No matter how honest, industrious, 
and law-abiding thfey may be, they are " scabs," 
and they often receive a moral, and sometimes 
a physical treatment more worthy of criminals 
than law-abiding men. The public, with a 
singular absence of that sense of justice which 
is supposed to be dear to American citizens, 
apparently expect more or less of this condi- 
tion of things as a matter of course, and moral 
and social abuse and opprobrium, when not 
accompanied by physical assault, is treated as 
a matter of slight consequence. Human law 
professes to protect every man in the right to 
either buy or sell labor or other commodity 
in the open market. A recent writer has well 
said that, "Attempts to do away with this right 
by force, intimidation, or interference have 
their logical end in anarchy. The majesty of 
the law is the foundation of all our liberty and 
prosperity, and every man should give it his 
moral support." 



LABOR COMBINATIONS. 73 

The sentimental writers, as a rule, utterly 
ignore this unorganized majority of laborers, 
as though no such people existed. When they 
speak of labor, they only refer to the minority 
portion, or that which is organized. Are not 
these men American citizens, and are they not 
entitled to common rights and protection, under 
a form of government which professes to be 
democratic and impartial ? They have a right 
to sell their labor as they choose to willing 
purchasers, and when the government fails 
to protect them in this right, then American 
boasted freedom and liberty is a sham and a 
farce. These men, as a class, are ignored by 
the politician in his zeal to bid for the labor 
vote, and even the newspaper press, as a rule, 
gives them scanty recognition. They are quiet, 
peaceable, law-abiding, and not obtrusive or 
loud ; but, at the same time, they form a very 
solid and important part of the live-oak in the 
hull of the "Ship of State." 

Fifth. Their logical tendency and influence 
is in the direction of socialism. 

Socialism as a system will be discussed in a 
separate chapter, but the logical tendencies that 
have cropped out of the agitations of organized 
labor are so marked, that it is proper to note 
them briefly in this connection. When natural 



74 NATURAL LAW IN THE BUSINESS WORLD. 

and business principles are left behind, and sen- 
timental methods are adopted, all solid ground 
is abandoned. As well attempt to found a 
solid structure on the quicksand, or combine 
mathematics with fiction, as to expect that the 
current of business can run smoothly in an ob- 
structed channel. The natural and logical out- 
come of any compulsory kind of socialism in 
the end, is the disruption of society and govern- 
ment. When the anchor is hauled on board of 
a craft which floats on the bosom of a river, 
it naturally drifts down stream. Any candid 
man must have observed that there is, and has 
been, a close sympathy between labor and 
social organizations, especially in the larger 
cities. The socialist holds out an alluring bait 
to the ignorant masses of foreign laborers, and 
soon they are made to feel that, because some 
others have more of accumulated labor than 
they have, the world has not been fair with 
them, and that they have not had their rights. 
Labor combinations and socialism shade inta 
each other, and it is natural that they should, 
for socialism is nothing more nor less than 
logically advanced sentimentalism. As before 
noticed, the followers of Henry George find an 
encouragement in the solid vote of organized 
labor, and the great moral pressure brought to 



LABOR COMBINATIONS. 75 

bear upon every member in New York to vote 
for him does not well comport with the idea of 
a free ballot. Any candid, unprejudiced view 
of the situation discloses the fact that labor 
organizations are drifting toward dangerous 
ground. 

Let no one claim that the foregoing chapter 
is directed against labor, for it is most decid- 
edly in its interest. Natural Law, when re- 
spected, freely offers its benediction and aid in 
behalf of all honest labor and industry. The 
welfare of labor is the welfare of society. 

This study of labor organizations has been 
made from the laborer's standpoint and in his 
interest. We believe that truth is the best 
friend of the working man, and that error and 
prejudice are his worst enemies. It is a great 
misfortune to laboring men that they so often 
mistake false friends for true ones, w 



SOCIALISM. 



" Where law ends tyranny begins. " 

Wm. Pitt, 

" Of what avail the plough and sail, 
Or land or life, if freedom fail?" 

" Vice is a monster of so frightful mien, 
As to be hated needs but to be seen; 
But seen too oft, familiar with her face, 
We first endure, then pity, then embrace." 

Pope, 



SOCIALISM. 

TT is only necessary to make an application 
of the principles of Natural Law to socialis- 
tic systems, real and proposed, to find that they 
are not adapted to man's constitution. They 
are, therefore, artificial and impracticable. . If 
they are unnatural, it follows necessarily that 
they are harmful and destructive. Their nat- 
uralness is the true test, and if that is wanting, 
it becomes certain that their wide or general 
application to society can never be successful 
or beneficial. Webster defines socialism as w a 
social state in which there is a community of 
property among all the citizens." It is foreign 
to our purpose to attempt any historical or 
detailed study of the various societies or or- 
ganizations that belong to this general class. 
Though differing widely in theory and doc- 
trine, they have certain features in common, 
and these are visionary and abnormal in their 
character. In their practical destructive effects 
on society they are quite unlike ; for while the 
milder forms of voluntary socialistic commu- 



80 NATURAL LAW IN THE BUSINESS WORLD. 

nities may be harmless, the more violent and 
compulsory kinds, if carried out, would result 
in social chaos. Socialism is not indigenous to 
American soil, and is an exotic in any country 
where free and constitutional government pre- 
vails, for its assumed merit is that it is the 
opposite of despotism. As by Natural L:iw 
extremes meet, so violent or compulsory social- 
ism becomes itself despotism. Its apostles and 
advocates in this country are rarely found among 
native American citizens, or even among those 
of foreign birth who have any intelligent appre- 
ciation of our political system. There are at 
present in the United States three distinct 
socialistic organizations, whose avowed purpose 
and aim is a social revolution. Two of these 
advocate its accomplishment by violent warfare 
and the destruction of property, so that there is 
apparently no real distinction between them 
and the avowed Anarchists. They are willing 
to engulf society, themselves included, in gen- 
eral ruin, and to relapse into consequent bar- 
barism, rather than that existing civilization 
and government should continue. That these 
extremists gather moral encouragement from 
milder socialists, some of whom advocate the 
same end, but hope to bring it about by peace- 
ful means, is beyond a doubt. The pronounced 



SOCIALISM. 81 



sentimentalisra of the times, which is making 
such efforts to set aside natural principles, is, 
though perhaps unwittingly, lending encourage- 
ment in the same direction. The warfare against 
Natural Law is carried on by an army of allies 
whose several motives and aims greatly vary, 
but in this general hostility they are a unit. 

Experience, which is the indorser of law, 
shows the uniform failure of socialism as a 
system, even when tested by experiments under 
conditions most favorable to success. Volun- 
tary socialism, in limited communities, under 
the most flattering circumstances, and with the 
most conscientious and enthusiastic leaders, has 
been tried again and again, but with little 
success. It is true that in certain instances 
societies having socialistic features have existed 
for some time, but in none has this characteris- 
tic been one of vitality and growth. Where 
they have not entirely disintegrated, they have 
led a lingering existence in spite of more or less 
communistic ideas that found place in their sys- 
tems. If such mild, harmless, and promising 
experiments have proved futile, what might be 
expected as the result of a violent and compul- 
sory commune, attempted, not with a voluntary 
and picked community, but with all the hetero- 
geneous elements of society? A menagerie let 



82 NATURAL LAW IN THE BUSINESS WORLD. 

loose would be a fit illustration of the result. 
It would very likely produce an upheaval simi- 
lar to the French Ke volution. World-wide ex- 
perience, as well as the teachings of Natural 
Law, proves the truth of the proposition : That 
the condition of civilization or barbarism among 
nations is in proportion to the security and in- 
violability of individual property rights. Adam 
Smith asserted that the security afforded to 
property by the laws of England had more than 
counterbalanced the repeated faults and blun- 
ders of the government. It is not too much to 
claim that the foremost and commanding posi- 
tion of England and the United States among 
the nations of the earth is due to the safe- 
guards erected around property rights, and the 
but slightly obstructed operation of natural 
laws by governmental or other interference. 
No nation can be named where property rights 
are insecure, in which there is not a coexist- 
ing state of barbarism. These truths are so 
obvious that it seems superfluous to demon- 
strate them. But the fact remains that char- 
latans in political economy are making great 
efforts to disseminate opposite theories, and 
apparently with much success. In this they 
are aided by the sensational portion of the 
newspaper press. 



SOCIALISM. 83 



It is the main province of legislation and 
political science to provide the best and surest 
ineaus for protecting property rights. This is 
all-important, for the reason that the right of 
property is the most powerful of all encourage- 
ments to industry and the increase of wealth. 
The certainty that a man can enjoy the fruits of 
his toil is the stimulus to all production, enter- 
prise, and prosperity, with the individual and 
nation. In those parts of the world where the 
title to property depends upon a strong right 
arm, or where it is liable to be confiscated by 
the ruling power, production is confined to 
its rudest and most primitive forms. Henry 
George's doctrine of general or governmental 
ownership of land is already in force in parts 
of Asia and Africa, and, as a natural result, 
there is no fixed property except of the rudest 
description, and valuables are either hid in the 
earth, or quickly carried by caravans to places 
where private ownership is recognized and pro- 
tected. This plausible writer proposes by the 
adoption of his plans to do away with poverty, 
and he begins with the confiscation of all private 
property in land. He would take the house-lot 
of every man who has been thrifty enough to 
acquire one, but would graciously permit the 
owner to retain the building. But with in- 



84 NATURAL LAW IN THE BUSINESS WORLD. 

creased pressure from a naturally enlarged class 
of the unthrifty and improvident, it seems prob- 
able that the next step in order would be to 
take the house also. After leaving the firm 
anchorage of perfect security to property af- 
forded by government and law, there is no solid 
ground along the route before the end is reached, 
which is the denial of all right. From the very 
nature of the case, there is no middle ground. 
In the opening of Chapter III., Book VII., of 
"Progress and Poverty," the author says : — 

"The truth is, and from this truth there can 
be no escape, that there is, and can be, no just 
title to an exclusive possession of the soil, and 
that private property in land is a bold, bare, 
enormous wrong, like that of chattel slavery." 

And further on in the same chapter : — 

"And by the time the people of any such 
country as England or the United States are 
sufficiently aroused to the injustice and disadvan- 
tages of individual ownership of land to induce 
them to attempt its nationalization, they will be 
sufficiently aroused to nationalize it in a much 
more direct and easy way than by purchase. 
They will not trouble themselves about compen- 
sating the proprietors of land." 

Nationalization has a softer sound than forci- 
ble seizure or robbery, but in this case it evi- 



SOCIALISM. 85 



dently means the same thing. The crime would 
be the same whether it was committed by the 
government or by armed outlaws. With such 
a starting point, this writer evolves from his 
own imagination a Utopian condition of society 
in which the present ills are nearly or quite all 
eliminated. What a marvellous edifice for such 
a foundation ! Eeference is made to this work 
on account of the notoriety of its author, and 
its very wide circulation. Its unique boldness 
and audacity have given it a greater amount of 
free advertising than has been bestowed on any 
ten useful and practical books that have been 
issued -during the last five years. Its senti- 
ments and conclusions remind one of the fanci- 
ful dreams of an opium-eater, full of beauty, 
color, and harmony, but whose realization is 
grim, black, and hideous. 

With human nature as it is, how many would 
be provident, industrious, or economical under 
the most perfect system of socialism yet con- 
ceived? Enterprise, ambition, invention, and 
progress would all wither, as if under the shade 
of the deadly upas. If an ideal millennium 
had come upon the earth, so that men loved 
others more than themselves, there would be 
but little use for civil law or government. 
Until such a time, and until self-interest shall 



86 NATURAL LAW IK THE BUSINESS WORLD. 

cease to be the main-spring of human action, 
they will be indispensable to define and protect 
individual rights. 

The genius of socialism seems to be embodied 
in the old adage that "the world owes every 
man a living." No matter how lazy, improvi- 
dent, or reckless he may be, his industrious 
neighbor, who by patient toil has become the 
owner of accumulated labor, is expected to 
divide with him, and, in future, to keep on 
dividing. 

Socialistic agitators ring so many changes on 
such recently coined phrases as "impending 
revolution," "wage-system slavery," " industrial 
crisis," etc., indicating some expected revolu- 
tion, that many poor dupes actually look for 
a time not far distant when the government will 
invite them to help themselves to their neigh- 
bors' land and goods, and when work will be a 
thing of the past. Is it a wonder that great 
masses of ignorant emigrants become saturated 
with such ideas, when it is considered that 
socialistic, atheistic, and anarchic literature is 
their chief intellectual diet? Many are not 
aware of the extent to which this condition of 
things exists among the great number of Poles, 
Bohemians, and the lower class of Germans, 
who are found in solid masses in all our large 



SOCIALISM. 87 



Western cities, and who know little or nothing 
of our institutions or language. Here is a fer- 
tile field for sowing the seed of moral and eco- 
nomic truth. The right sort of books in their 
own tongues would do much to neutralize the 
baneful influences which loom up like a black 
cloud on our national horizon. 



DEPENDENCE AND POVERTY. 



' ' Teach every man to spurn the rage of gain ; 
Teach him that states of native strength possessed, 
Though very poor ; may still be very bless' d" 

Goldsmith. 

•' To a close-shorn sheep God gives wind by measure" 
" Help thyself and God will help thee." 

Herbert. 



VI. 

DEPENDENCE AND POVERTY. 

HPHE charitable societies and organizations of 
the city of London are far more numerous 
and wealthy than those of any other city in the 
world, and in no other place is there such a 
vast amount of abject and hopeless poverty. 
What relation have these two facts to each 
other; or, in other words, which is the cause 
and which is the effect? If we study human 
nature in the light of Natural Law for the solu- 
tion of this problem, and also carefully observe 
the teaching of experience, we shall find that 
supply and demand equal each other here, as in 
the domain of commerce. Let the supplies of 
charity be doubled or quadrupled, and the de- 
mand from dependence will keep pace with it. 
These relations and sequences being general 
and uniform, . prove that they are not a matter 
of chance or uncertainty, but, rather, are gov- 
erned by natural and unvarying principles. As 
rapidly as dependence can find something to 
depend upon, it will multiply and increase. 
In contrast with London is Paris, where race, 



92 NATURAL LAW IN THE BUSINESS WORLD. 

conditions and customs would lead us to expect 
more and worse poverty. We find instead 
much less, and of a less hopeless variety. 
Paris makes but a small showing in charitable 
organizations when compared with London, 
where the variety and number of old, wealthy, 
and thoroughly organized and equipped benev- 
olent associations is remarkable. These illus- 
trations and similar ones, which might be cited, 
do not prove that charity is an evil. It is mis- 
applied charity, which is not truly charity at 
all, of which the world has been full, that is out 
of harmony with natural principles. 

Charity is divine, heaven-born, and the 
brightest and noblest of all virtues ; but this 
does not alter the fact that so-called charity, 
misapplied, breeds dependence with unerring 
certainty. 

The diseased, aged, helpless, and impotent 
are within its sphere, and he who has surplus 
wealth gets the most real sweetness out of it 
by applying it directly to lessen the misery and 
lighten the burdens of this ever-present class. 
Natural Law is not uncharitable, or cold and 
mechanical, as some might hastily conclude ; 
but is compassionate and bountiful, whenever 
it is not transgressed and defied. Benevolence 
is normal, and the hospitals, asylums, and other 



DEPENDENCE AND POVERTY. 93 

humane institutions are not only entitled to 
our merciful regard, but we owe them a debt. 
Charity is a natural quality, and it would be 
unnatural not to exercise it. It is, perhaps, 
fortunate for society that it has its helpless and 
really dependent class, for it furnishes an ample 
field for the exercise of the kindly and brotherly 
motives of man's nature. While all these facts 
cannot be too greatly emphasized, it remains 
that every man who has in him the possibilities 
of independence, is degraded and injured by 
opportunities to lean upon anything outside of 
himself. The contrast is the widest possible 
between the results of charity exercised in its 
true sphere, and those of its abuse, or when 
applied outside of its legitimate functions. 

The so-called paternal governments of Eu- 
rope have in them elements which tend di- 
rectly to add to the numbers and degradation 
of the dependent classes, and to make their 
condition more hopeless and fixed in its char- 
acter. It is just as demoralizing and destruc- 
tive of a self-reliant manhood to lean upon the 
State, as upon some private organization. A 
government that upholds the rule of laisser 
/aire, or non-interference, is that under which 
true manhood and independence are developed 
and cultivated, 



94 NATURAL LAW IN THE BUSINESS WOULD. 

Mrs. James T. Fields, in her admirable book, 
w How to help the Poor," says : — 

" To teach the poor how to use even the small 
share of goods and talents intrusted to them 
proves to be almost the only true help of a 
worldly sort which it is possible to give them. 
Other gifts, through the long ages tried and 
found wanting, we must have done with. 
Nearly a million of dollars, in public and pri- 
vate charities, have been given away in one 
year in Boston alone ; and this large sum has 
brought, by way of return, a more fixed body 
of persons who live upon the expectation of 
public assistance, and whose degradation be- 
comes daily deeper. The truth has been made 
clear to us that expenditure of money and 
goods alone does not alleviate poverty." 

A sharp line of demarcation needs to be 
drawn between a poor man and a pauper. 
There is little necessary resemblance between 
poverty and pauperism. It is the worst calam- 
ity that can befall a poor man to become pau- 
perized. He who blindly scatters money in the 
name of charity is liable to do incalculable 
harm. On the other hand, he who teaches a 
man how to help himself, and raises him from 
the dependent into the thrifty class, does so- 
ciety and humanity a great favor. No person 
of means can discharge his obligations to soci- 



DEPENDENCE AND POVERTY, 95 

ety by careless and indiscriminate giving. In- 
dustrial schools, and any other aids that teach 
the way of self-support, and give the young 
such a training as will put them on their feet, 
deserve the most liberal support and encour- 
agement. Help some dependant to discover a 
path of self-support, for by this act of real 
charity you bring him into, harmony with 
Natural Law, and no gift of money could equal 
that favor. The knowledge of something to 
fall back upon in the future, outside of one's 
own exertion, causes improvidence in the pres- 
ent. The tramp who knows that charity and 
the soup-house are in readiness for him when 
winter comes, will not put forth much eifort 
to find employment during the summer and 
autumn. 

It is not the province of this book to present 
statistics to prove how much the dependent 
and pauperized classes are increased by intem- 
perance, vice, and crime. That*these are the 
true causes, however, of nine tenths of the 
poverty, misery, and degradation is evident to 
any candid observer. It is idle and fallacious 
to attribute evils due to these causes, to any 
inherent fault of our present social system. 



EMPLOYERS AND THEIR DUTIES. 



"And each shall care for other, 
And each to each shall bend. 
To the poor a noble brother, 
To the good an equal friend." 



Emerson. 



"Why should a man ivhose blood is warm within, 
Sit like his grandsire cut in alabaster?" 

Shakespeare, Merchant of Venice, Act I. 

"And learn the luxury of doing good." 

Ooldsmith. 



vn. 

EMPLOYERS AND THEIR DUTIES. 

"VTATURAL Law has some plain words for 
^ employers, for they, no less than em- 
ployes, are under its dominion, and, if trans- 
gressors, are subject to its penalties. While 
business should always be done on business 
principles, there is abundant room and oppor- 
tunity for other obligations outside of that of 
service rendered and paid for. Natural Law 
comprehends within its scope not only eco- 
nomic and mathematical business rules and 
methods, but it provides an important place 
for the exercise of the kindly and brotherly 
elements that are inherent in man's nature. 
These, while not strictly entering into business 
itself, surround, gild, and refine it, lighten its 
burdens and soften its cares. They are like 
the springs and cushions to a carriage, which, 
while they have no direct relation to the speed 
or distance, render our progress much more 
comfortable and easy. Natural Law is demo- 
cratic. It recognizes a man as a man as long 
as he fulfils the conditions of manhood. The 



100 NATURAL LAW IN THE BUSINESS WORLD. 

duties of an employer to his workmen are 
entirely discharged with the payment of stipu- 
lated wages, so far as they stand related within 
the business and economic sphere ; but there 
are other relations that cannot be ignored. 
They involve a recognition of the fact of man's 
brotherhood, and that he is a part of one 
moral and social economy ; and these rela- 
tions, though different, are equally natural 
and necessary. As harmony with Natural 
Law always lends powerful aid in the direc- 
tion of success, the employer who gives heed 
to these higher and finer claims upon him, not 
only better discharges his obligation to society, 
but at the same time smooths the road toward 
his own prosperity and reward. 

Employers should not forget that the em- 
ployed are men, not machines. A larger 
kindliness toward and interest in employes 
would largely dispel that illusion of a natural 
antagonism, on which labor unions flourish 
and production decreases. The workmen are 
the staff of the employer. A general might 
almost as well expect a successful campaign 
with his staff selected from the hostile army, 
as for an employer to expect good, honest ser- 
vice from men whose feelings are antagonistic, 
whether with, or without, good cause. Cul- 



EMPLOYERS AND THEIR DUTIES. 101 

tivate friendliness and sympathy with your 
employes, not by flattery and smooth words, 
but by genuine interest in their welfare. The 
great difficulty, especially in large establish- 
ments, is that employer and employed are too 
far apart. There is little or no personal con- 
tact or community of feeling. Misunderstand- 
ings and difficulties vanish when discussed 
face to face in a kindly spirit. Show your 
employes that you are more truly their friend 
than is the labor agitator, who comes from 
the outside to stir up strife, and his occupa- 
tion will be gone. In this direction, and this 
only, can be found the remedy for labor 
troubles, and the only solution of the so- 
called labor problem. Disband the horizon- 
tal and combative combinations of laborers 
with laborers, and employers with employers, 
and cultivate alliances and interests in the 
other direction. This would have to begin 
with some conciliation on both sides, for both 
have been looking in the wrong direction, and 
moving on the wrong track. The pecuniary 
success of both parties can only be increased 
by this means. This change of front is very 
important, notwithstanding it is in direct op- 
position to the ground taken by many recent 
eminent writers on the "labor problem," the 



102 NATURAL LAW IN THE BUSINESS WORLD. 

burden of whose works has been to urge work- 
ing men into combinations hostile to their own 
interests. This course will never solve the 
labor problem, but will render its solution 
more difficult. The head and hands must have 
one object, or else there will be trouble for 
both. Let the employer also bear in mind 
that all that has been recommended on his 
part he can do without injuring either the 
independence or self-respect of himself or his 
employe. A unity of interest between em- 
ployer and employed is natural, because there 
is no competition between them. Competition 
is always horizontal, or on the same plane. 
The natural competition of employes is with 
employes, and of employers with employers. 
The union should be between the two un- 
like elements ; then each supplements the 
other and forms completeness. Solidify and 
strengthen one of these to the utmost extent, 
to the neglect of the other, and the result is 
as defective and useless as the sharpening of 
one blade of a pair of shears with its compan- 
ion missing. 

The best employers naturally attract the best 
help, and such a combination has great strength. 
The employer has on his side the risks and con- 
tingencies of the business, and therefore, if he 



EMPLOYEES AND THEIR DUTIES. 103 

is wise, will recognize and cultivate all those 
elements which tend to harmony, and as a 
natural consequence, to success. Suppose that 
after inventories have been taken at the end of 
a prosperous year, the owner should distribute 
a certain part of the surplus to his faithful help, 
does not every one believe that, even from a 
business standpoint, it would be a good invest- 
ment? While not a legal obligation, neither 
would it be a charity, but merely a special 
reward for special faithfulness. Can we doubt 
that such a course would be mutually beneficial 
in the long run? It would take very strong 
inducements to start a strike among workmen 
who were dealt with in such a spirit. We have a 
notable example of this in the case of Leclair, 
a French employer, who began this system over 
forty years ago. After suffering from the effects 
of discontent, antagonism, and unfriendly suspi- 
cion among his men, he resolved to try an experi- 
ment. In 1842, after calling together the most 
faithful of his help, forty-four in number, he 
threw upon the table a bag of gold containing 
$2,375, distributing to each his share, averaging 
over fifty dollars per man. This was an object 
lesson that had an effect. The change was marked. 
Distrust was replaced by confidence ; and, instead 
of discontent and unfriendly suspicion, a friendly 



104 NATURAL LAW IN TEE BUSINESS WORLD. 

interest and trust became the rule. When the 
men found that they had an interest in their 
employer's prosperity, they became more faith- 
ful to every requirement, and performed every 
duty more carefully and thoroughly. The mu- 
tual benefits of this plan at once became so 
apparent that M. Leclair formally adopted it ; 
and, although he died in 1872, his successors 
continue the practice. At the present time, 
nearly two hundred firms in Europe have 
adopted this plan substantially, varying only 
in minor details. Quite a large number of 
American firms, also, have adopted this method, 
or others which are similar in spirit and prac- 
tice. Messrs. Lorillard & Co., of New York, 
recently distributed in one year $16,500 among 
their help, as a part of surplus profits which 
they were willing to relinquish to their faithful 
workmen. The results of the various experi- 
ments in this direction have been almost uni- 
formly successful, and in several cases to a 
marked degree. Aside from the actual pecun- 
iary bonus, which in many cases" is small, the 
kindly spirit of which the act is an indication 
is powerful in its moral effect. A general exhi- 
bition of it among large employers would have 
a beneficial effect in clarifying the muddled 
labor question. 



EMPLOYEES AND THEIR DUTIES. 105 

The employer should also take a deep inter- 
est in the dissemination of correct principles in 
morals, temperance, and hygiene among his 
workmen, and by his influence and aid, further 
all practical movements for their improvement 
and elevation. Opportunities for this vary 
much in different places and conditions, but 
there is room for a great and general advance 
in these particulars. Large employers, whose 
establishments are in small factory towns, or in 
isolated communities, have it especially in their 
power to accomplish much for the good of their 
help, without any sacrifice of independence or 
self-reliance on the part of the workmen. Per- 
haps the most notable experiment of this kind 
that has been tried in the United States is in 
the town of Pullman, near Chicago. As the 
Pullman Company owned the land from the 
start, they were able to exercise more perfect 
control than would often be possible ; but still, 
their plan might be approximated in many 
cases, and with great benefit. Though several 
thousand men are employed, no places for the 
sale of liquors are allowed. This alone secures, 
in general, a superior class of workmen. The 
houses for the occupation of the employes are 
built with careful regard for health and sanitary 
excellence, and, in addition, are models in their 



106 NATURAL LAW W Til : BUSINESS WORLD. 

tasteful and modest architectural effect. The 
water, gas, and sewer systems are of the most 
approved kind, and owned by the company. A 
public library, schools, churches, and a suitable 
place of amusement all receive such aid and 
oversight from the company as will insure their 
maintenance and efficiency. The rentals of the 
workmen's homes are fixed on a very moderate 
scale, being only sufficient to pay a fair interest 
on their cost, and other facilities are furnished 
for economy and comfort in living. While the 
workmen pay for everything they have, thus 
preserving their independence, they are able 
to get the best at low rates. The Pullman 
experiment has been very successful, and is 
worthy of imitation. 

Many employers mistake their own interests, 
and add to their difficulties, by an unjust and 
unnecessary severity toward their employes, 
and the exercise of an overbearing and tyran- 
nical spirit. If such are prosperous in busi- 
ness, their success is in spite of a formidable 
obstacle. 

A few words in regard to " lock-outs " are in 
order in this connection. They are artificial 
and unnatural, and, in many cases, cruel in 
their effects ; and, except in very rare instances 
to counteract wholesale dictation, they are rep- 



EMPLOYERS AND THEIR DUTIES. 107 

rehensible. When they are made for the pur- 
pose of artificially forcing down the price of 
labor, they are to be condemned from a moral 
point of view; and, in addition, they bring 
their own legitimate punishment, as a violation 
of Natural Law. Any kind of combination 
among employers, having in view a compulsory 
reduction of wages, or harder conditions, is not 
only unwise, because it arouses an antagonistic 
spirit among employes, but is also unprofitable 
in its after effects. Only in exceptional cases, 
to resist wholesale tyranny on the part of labor 
combinations on the principle of combating one 
evil with another, can there be any excuse for 
combinations among employers. 

What is called black-listing is also a weapon 
that should be used with extreme care, if at 
all, because it is very liable to abuse. If it 
were always confined to bad employes, so 
proved, it might have redeeming, and perhaps 
wholesome, features. It is, however, so often 
employed to gratify personal prejudice, and 
even revenge, that its legitimate use is ex- 
tremely restricted. 

The natural elements tending powerfully 
towards success to an employer of labor may 
be said to be the development of an esprit du 
corps among his help, and the secure possession 



108 NATURAL LAW IN THE BUSINESS WORLD, 

of their respect, interest, and good-will. An 
ideal establishment is one where employer and 
employed are each proud of their connection 
with the other. Such a combination means the 
highest wages, and, at the same time, the best 
and most economical production. / 



STATE ARBITRATION. 



'And sheathed their swords for lack of argument ." 

Shakespeare, King Henry V., Act III., Sc. 1. 

"Beware 
Of entrance to a quarrel ; but being in, 
Bear't that the opposed may beware of thee." 

Shakespeare, Hamlet, Act I., Sc.3. 



vni. 

STATE ARBITRATION. 

THHE legislatures of several States have, dur- 
ing the last few years, made provision for 
boards or tribunals of arbitration, whose busi- 
ness is the settlement of disputes and con- 
troversies between employers and employes. 
These provisions for the machinery of arbitra- 
tion vary somewhat in detail, but are similar in 
general plan and operation. As we have only 
to consider the principle, it is not necessary to 
notice the various plans for the constitution of 
the boards, their prescribed rules of procedure, 
or the limits of their jurisdiction. General ex- 
perience up to this time confirms the conclusion 
that no practical or permanent benefits can be 
expected from arbitration as a State system. 
It may be of some use in its moral effect, as a 
temporary expedient or makeshift, to bridge 
over chasms of active hostility, or for emer- 
gencies when reason has lost its sway ; but 
it is useless as a means of the permanent 
settlement of differences continually arising 
between capital and labor, while they occupy 



112 NATURAL LAW IN THE BUSINESS WORLD. 

their present artificial and antagonistic attitude. 
Courts are already organized, and laws in force, 
to construe and enforce existing contracts ; but 
the province assumed by these tribunals, at 
least in some States, of making new contracts 
between citizens, and of fixing prices other 
than those established by supply and demand, 
is a novel and unwarranted advance in the 
direction of paternal government. 

In a recent case in Massachusetts, relating to 
the rate of wages to be paid by a manufactur 
ins; firm to its workmen, a hearing was bea*un 
by the State board, upon application of former 
employes alone (the firm not joining in it), 
most of whom were elsewhere employed at the 
time of the application, and some were actually 
engaged in a competing organization. The firm 
put in a plea of no jurisdiction. The board 
reserved the point, but proceeded with the 
hearing. After several days of deliberation, 
the board decided not to assume jurisdiction: 
but the ground of such decision was understood 
to be the fact that the applicants were not at 
this time employed by said firm, rather than 
for the reason that only one side joined in the 
application. Bearing this point in mind, what 
manufacturer can possibly have any security in 
engaging in any business, if he is to be debarred 



STATE ARBITRATION. 113 

from the natural right and freedom of buying 
labor at its market price, or at a rate offered by 
those who are willing to sell? It is evident 
that no person or corporation will permit the 
State to transact his business for him ; and if 
the State insists upon so doing, then business 
must come to an end. As well have a State 
board to determine the natural or proper market 
price for potatoes, clothing, or dentistry. Even 
if this were a proper sphere for this court, it is 
evident that, in order to arrive at just and intel- 
ligent decisions, it must adopt some rules and 
methods of procedure like a court of equity ; 
that is, it must call in witnesses on both sides, 
and make up a verdict on the weight of evi- 
dence. It is also plain that, even if the State 
had the right to make arbitrary contracts and 
prices between citizens, regardless of natural or 
market values, no board could possibly judge 
intelligently of the great variety of occupations, 
conditions, and questions that would come before 
them. They might be able, intelligent, and 
honest ; but in addition, it would be necessary 
for them to be universal experts. No two cases 
would be alike. It would not be simply a ques- 
tion of law and principle, or right and wrong ; 
but, rather, of materials, qualities, markets, 
credits, competition, expenses, and many other 
8 



114 NATURAL LAW IN TEE BUSINESS WORLD. 

elements that would all have a bearing. Aside, 
then, from its strained and unnatural jurisdic- 
tion, it would be a physical and mental impossi- 
bility for any board to grapple with such a 
variety of problems as would come before 
them. 

Arbitration may have value in its proper 
sphere, but the fixing of prices and forcing 
them upon an unwilling purchaser is outside of 
its legitimate functions. In the construing and 
enforcing of existing contracts, it is often easier, 
quicker, less expensive, and more satisfactory 
than the regular process of law ; but its adop- 
tion must be voluntary on both sides. The 
time-honored method of settling disputes by 
each party choosing one who is familiar with 
the conditions, and they together choosing the 
third, the three then acting together to make a 
just settlement, is a commendable way of 
adjusting differences without requiring the in- 
tervention of a State board. 

Conciliation, however, is more feasible, and, 
in general, more useful than arbitration. There 
is an important difference between them. The 
former may be employed, regardless of State 
law, and is always mutually voluntary. Often 
all that is necessary to remove serious disputes 
is the assistance of conciliators who possess the 



STATU ARBITRATION. 115 

confidence and esteem of both parties. They 
must also have a thorough knowledge of all the 
details and peculiarities of the special business, 
such as would be impossible with any State 
board. By such means angry feelings and prej- 
udices may often be subdued, and reason and 
good sense brought to the front. When, in a 
conciliatory spirit, those who differ can be 
brought to sit around the same table and reason 
together in a friendly way, differences rapidly 
disappear. This would not often be the result 
of formal arbitration, which has the character 
of a court of law, in the fact that each side is 
arrayed against the other. Arbitration, in the 
proper sense of the word, must proceed under 
statutory or judicial authority. Even when 
both parties enter into it voluntarily, they must 
relinquish their freedom to a great extent by 
consenting in advance to accept the award of 
the arbitrators, so as to enable it to be judicially 
enforced. This gives it essentially the char- 
acter of a court of law, with all its incidental 
antagonisms and bitterness. If it has not these 
features, it is in reality conciliation, and not 
arbitration. 

As long as the present strained and opposing 
relations exist between capital and labor, dis- 
putes and controversies will be numerous and 



116 NATURAL LAW IN THE BUSINESS WOULD. 

bitter. Any ostensible settlement of them by 
boards of arbitration will be no more a real 
settlement than would a truce of fifteen min- 
utes between opposing armies be a treaty of 
peace. Under the head of conciliation may be 
included all that is voluntary, friendly, reason- 
able, and fair in its character, and its possi- 
bilities for usefulness are great. Arbitration, 
which must take account of the legal, opposing, 
and two-sided phases of a question, is well- 
nigh valueless for permanent results. There is 
much of the combative element in human nature, 
and, instead of stimulating it to greater activity, 
it should be counteracted and subdued by other 
qualities which are just as inherent in man's 
constitution. Only by such means can the 
different fetrata of society be united, harmonized, 
and solidified. 



CAN CAPITAL AND LABOR BE HARMONIZED? 



"One touch of nature makes the whole world kin." 
Shakespeare, Troilus and Cressida, Act III., Sc. 3. 

"He had a face like a benediction* 

Cervantes, Don Quixote, Part I., Book II., Chap. 4. 

"Not chaos-like together crushed and bruis'd, 
But, as the world, harmoniously conf us' d, 
Where order in variety we see, 
And where, though all things differ, all agree." 

Pope. 



IX. 

CAN CAPITAL AND LABOR BE 
HARMONIZED ? 

T)EFORE considering in the light of Natural 
Law the direction in which we must look 
for any improvement in the relations between 
capital and labor, let us examine the grounds 
for the present dissatisfaction on the part of the 
latter. The claim is made on the part of labor 
that it does not receive a fair share of the prof- 
its of production. What constitutes a just 
division of these products ? Exactly what the 
so-called labor reformers and sentimentalists 
demand seems to be a matter of great uncer- 
tainty. The only unanimity among them is in 
their dissatisfaction. As any proposed new 
division must be made by artificial rules, it is 
not surprising that there can be no substantial 
agreement. When they abandon the solid 
ground of natural principles, and embark upon 
the restless currents of sentimentalism, there 
is no common resting place. 

It is not strange that manual laborers often 
feel dissatisfied. As a rule, they toil hard for 



120 NATURAL LAW W THE BUSINESS WORLD. 

mere subsistence. When they look around 
and see so many who have not only a suffi- 
ciency, but a surplus, they think there must be 
something wrong in a system under which 
there is such inequality. But such reasoning 
is based on a false foundation. Men are cre- 
ated with unequal capacities and powers, and 
it is beyond human ability to equalize them. 
Society could as effectually resolve that two 
and two make five. The world's conclusions 
already arrived at are in harmony with Natural 
Law. It values mental force at a higher rate 
than manual. It would be as futile to expect 
to change these as to level the Alps. The 
world is exact and unerring in its estimates. 
It marks its valuations on both mental and 
manual force with as great a degree of certainty 
as coins are stamped in a mint. 

The brain force of a McCormick, which con- 
ceived the reaping machine, was greater in, the 
results of its production than a million strong 
right arms which could wield the sickle. The 
world, therefore, makes its appraisement of his 
product at millions of dollars, and willingly 
pays the obligation. The brain power, not 
only of inventors, but of all those who possess 
the ability to organize and execute, has a high 
valuation. The mental force that organizes, 



CAN CAPITAL AND LABOR BE HARMONIZED? 121 

builds, and puts in operation a great railroad 
system is worth, perhaps, millions,* because its 
product may be the settlement and develop- 
ment of two or three States or Territories. If 
this kind of force were more plentiful, the 
world would not put such an extravagant valua- 
tion upon it. A hundred thousand muscular 
bodies may be found as often as a single brain 
of this quality. No amount of sentiment can 
change the arrangement of these natural prin- 
ciples. Were it in our power to explore be- 
yond the boundaries of human wisdom, we 
should probably find that it is best as it is. It 
is only the few who are skilful in originating 
enterprises and in conducting them to a suc- 
cessful termination. They also have a better 
knowledge of Natural Law, which they make 
the most of by securing its aid. If the many 
could command all these advantages of mental 
power, there would be a much wider table-land 
of equality. It is now only the lofty peaks of 
attainment and production that attract special 

* We do not forget that there are men of this class who 
have amassed large fortunes by stock manipulations which 
are not a legitimate form of industry. Such an exercise 
of mental energy is unnatural, perverted, and hostile to 
the best interests of society. Natural Law would sanc- 
tion restrictive legislation when applied to such artificial 
operations. 



122 NATURAL LAW IN THE BUSINESS WORLD. 

attention. Having found that inequality is a 
fixed condition, based on law, it is unwise to 
complain of it, and foolish to expect to abolish 
it. Did the Creator make a mistake when he 
made men of unequal capacity? As it is, 
every man g^ts the reward of his own labor. 
This fact furnishes a continual stimulus to the 
lower to advance towards the higher. Were it 
not for brain labor, we should still be in bar- 
barism. It is the increased production of the 
mental force of the few that has developed 
civilization. Labor, which is now making the 
complaint, is getting a large share of the bene- 
fits of this improvement. A great share of its 
blessings is enjoyed even by the humblest. 

Capital is only the surplus that is saved above 
consumption, and it is not only the progenitor 
of civilization, but it is all that gives value to 
labor. Without it there would be no such 
thing as a demand for labor. So far, then, from 
being envious of another's greater attainment, 
we should rejoice over it ; for we are better off 
than we otherwise would have been. The capi- 
talist, who, with executive talent and millions 
of money, has built a railroad, has done a great 
favor to labor. Boundless acres, before use- 
less, are by its influence transformed into fruit- 
ful farms. Thousands of laborers thus find 



CAN CAPITAL AND LABOR BE HARMONIZED? 123 

sustenance and occupation, in addition to those 
who receive direct employment from the rail- 
road. It is a fallacy that the presence of the 
very rich in society tends to make the masses 
poorer. It is exactly the opposite. The senti- 
mental and false ideas now prevailing on this 
subject are the fruit of demagogism and envy. 
There is a kind of discontent which is wholesome, 
for it stimulates effort. But the variety now 
prevailing seems to be of the envious kind, for 
its spirit is to pull down, rather than build up. 
If these conclusions are correct, it follows that 
improvement for labor must be looked for in 
harmony with them. We shall succeed if we 
call to our aid the powerful machinery of natural 
principles, but fail if we challenge and defy 
them. There is no panacea or charm by which 
poverty may be abolished, and no rapid cure 
for the ills of society and inequalities of fortune. 
There is, however, room for vast improvement, 
if we seek it in the right direction. We must 
work along the lines of Natural Law, instead of 
trying to cross them at right angles. 

Before indicating in detail how the relations 
between capital and labor may be harmonized, 
let us notice briefly how this desirable result 
cannot be accomplished. 

It cannot be done by combinations of like 



124 NATURAL LAW IN TEE BUSINESS WORLD. 

elements, as of laborers with laborers and 
employers with employers. Natural competi- 
tion always exists between those w T ho are on 
the same level. If, therefore, a number of car- 
penters organize an artificial combination which 
holds them together, it is in direct opposition 
to the law of natural competition, which tends 
to pull them apart. It is a combination all on 
one side, and is as incomplete as a carriage 
would be with two of its four wheels removed. 
It cannot be accomplished by means of social- 
istic or paternal forms of government, for the 
reason that the socialistic principle is fatal to 
individual enterprise, and antagonistic to all 
the influences w T hich are necessary to inspire the 
many to work their way up to the height of the 
few. Neither can it be brought about by the 
promulgation of sentimental doctrines which 
teach the laborer that he is a poor, weak mem- 
ber of society, who needs guardianship. Ev- 
erything of this kind increases dependence, 
instead of raising men up to a higher and 
common level. 

Rather should we look for improvement 
wherever the interests of the two elements can 
be blended and unified, and production be 
increased, by subduing prejudice and using 
conciliation. Promulgate the fact that the inter- 
est of one is the interest of both. 



CAN CAPITAL AND LABOR BE HARMONIZED? 125 

Co-operation has been suggested as a solution 
of labor troubles. This, as a rule, has not 
worked well. The requisite brain force to 
organize and conduct business enterprises suc- 
cessfully has generally been wanting among 
working co-operators. The combined elements 
lack that variety that is necessary to complete- 
ness, and competition soon reveals their defi- 
ciencies. In general, these associations do not 
have the business ability, capital, and other 
elements of success that warrant the expecta- 
tion that they will be an important factor in 
remedying the dissatisfaction of labor. 

A system of profit sharing, by means of a 
more or less intimate industrial partnership, 
already alluded to, is, however, more promis- 
ing, and the principle is capable of wide and 
general application in one form or another. 
We believe that the escape from present diffi- 
culties can only be sought successfully in this 
direction, for nothing else will weld the two 
interests that are so popularly supposed to be 
diverse. The adoption of this plan will require 
capitalists and employers to take the initiative, 
which they can well afford to do in view of the 
prevailing discontent and antagonistic feeling 
in the ranks of labor. Whether or not there is 
good foundation for this feeling is not material. 



126 NATURAL LAW IN THE BUSINESS WORLD. 

It exists, and therefore some movement must be 
made * or all interests will suffer. These strained 
relations result in unwilling, imperfect, and 
lessened production, causing a loss to both 
interests. The natural effect on the laborer is 
seen in his rendering the least possible service 
that is compatible with full wages. His heart 
is not in the work. Give him even a small 
stimulus besides mere wages, and note if there 
is not improvement. Offer to those who are 
faithful and industrious a bonus at the end of the 
year. See if a division in this way of five, ten, 
or fifteen per cent, of the profits will not prove 
a good investment. Let the employer be frank 
with his employes, and thus gain their confi- 
dence and respect. In the case of railroad 
employes, and some other kinds of business, 
where it is not practicable to divide a percent- 
age of profits, try a system of rewards for 
faithful and continuous service. The mutual 
interest in the amount and quality of production 
is the important feature, and this may be 
attained in a variety of ways, of which the 
above are but suggestions. In this way, the 
employer will have interested friends in his 
service, instead of inimical laborers working 
under a temporary truce. This would give to 
business strength and cohesion. It would be 



CAN CAPITAL AND LABOR BE HARMONIZED? 127 

like a pyramid, with the employer at the apex, 
and beneath, the different varieties of workmen, 
each supporting the other from the base up. 
The liability of outside dictation, interference, 
or strikes, under such conditions, would not be 
worth mentioning. We earnestly advise em- 
ployers to try experiments in this direction. 
It might at first appear that the plans proposed 
are not strictly in accord with Natural Law ; but, 
upon further trial, we shall find that the union 
between self-interest and self-exertion is a prin- 
ciple upon which we can surely rely, because it 
is inwrought in human nature. In social eco- 
nomics, the laws of mind and those of finance 
must be considered in their connection. They 
overlap and mingle, and exercise a modifying 
influence on each other. 

A few suggestions to working men in conclud- 
ing this subject. Even if you have not the 
promise of a special dividend or bonus, your 
true interest is with your employer, and not 
with outsiders. Your hopes of promotion rest 
with him. As a rule, it will be for his interest 
to advance you as your merits and services war- 
rant. A half-hearted service has an injurious 
moral effect on yourself. If you really belong 
higher than you now are, an opportunity, in 
accordance with Natural Law, will certainly be 
afforded you to step up. y 



ECONOMIC LEGISLATION AND ITS PROPEE 
LIMITS. 



" There shall be, in England, seven half-penny loaves sold 
for a penny : the three-hooped pot shall have ten hoops ; and 
I will make it felony to drink small beer." 

Shakespeare, King Henry VI., Part II., Act IV., Sc. 2. 

" / it is excellent 
To have a giant's strength ; but it is tyrannous 
To use it like a giant." 

Shakespeare, Measure for Measure, Act II., Sc. 2. 



ECONOMIC LEGISLATION AND ITS 
PROPER LIMITS. 

rpO what extent the State may properly inter- 
fere with the industrial freedom of its citi- 
zens is a difficult and many-sided question. We 
shall not attempt to answer it in detail, but 
rather indicate certain general principles that 
seem to be deducible from Natural Law T , as a 
guide in its solution. The goal to be reached 
is the greatest good for the greatest number ; 
and natural principles are the finger-boards that 
point out the direct route. As a fundamental 
rule, it may be stated, first, that the State 
should not interfere in any business or enter- 
prise that may be more economically or effi- 
ciently carried on by private control, unless its 
public character makes it necessary. Second, 
that it should not interfere in questions of prices, 
rates, wages, hours, or any others whose proper 
settlement can only be found in the quotations 
of a free and untrammelled market. 

Under the first of these propositions, let us 
note the disadvantages of governmental manage- 



132 NATURAL LAW IN THE BUSINESS' WORLD. 

ment, as contrasted with that of individuals or 
corporations. Many examples will occur to the 
mind of an impartial inquirer, showing the 
superior excellence and frugality of private 
over municipal, State, or national administration. 
The advantage is so apparent, not only in cost, 
but also in efficiency and thoroughness of man- 
agement and execution, that it seems superfluous 
to call attention to it. For example, the public 
buildings of the United States, built by govern- 
mental or political organizations, have, in the 
aggregate, cost vastly more than if erected under 
private management. It does not follow that this 
difference is always the result of dishonesty or 
mismanagement. It is in the nature of things, 
or, in other words, in accordance with Natural 
Law. The more close and direct the connection 
between the investor and the investment, the 
greater will be the economy and efficiency ; and 
the more indirect and remote from the contrib- 
utor or tax-payer the expenditure, the greater 
will be the waste, mismanagement, and extrava- 
gance. It would seem that those persons who 
are advocating governmental management for our 
railroads and telegraphs must be blind to these 
facts, and to the teaching of experience. Take 
a great railroad system, the successful manage- 
ment of which requires the highest grade of 



EC 0X0 MIC LEGISLATION AND ITS LIMITS. 133 

executive talent, and put it under the control 
of a politician of the dominant party, and the 
result may easily be imagined. In proportion 
as the domain of State administration is wi- 
dened, the amount of" spoils," already too large, 
is increased, to be fought over under such a 
plan by politicians every four years. Divorce 
politics from any industrial enterprise, and a long 
step is taken in the direction of doing business on 
business principles. In the face of these unde- 
niable facts, is it not strange that intelligent 
men urge, with evident sincerity, that the incu- 
bus of national and political control be fastened 
upon some kinds of business now most efficiently 
conducted by private and corporate administra- 
tion? It is evident that dema^osrism is the 
real foundation of many efforts in this direction. 
It is expected, as a matter of course, that when 
a city hall, court house, State house, or custom 
house is to be built, the expense will be much 
greater, and the utility much less, than would 
be the case if the same were done by private 
enterprise. Official methods are extravagant, 
and operations under them are so hampered by 
red tape that they lack directness and efficiency. 
Rings, combinations, and favoritism are inci- 
dental in all such transactions. The opportu- 
nity for all these abuses is much greater under 



134 NATURAL LAW IN THE BUSINESS WORLD. 

our democratic form of government than with the 
nations of the Old World, whose powers are 
more centralized. There, the civil service is 
more a matter of business and less of politics. 
The necessary sphere of such governmental 
action among us is limited to those enterprises 
which, from their public nature, are beyond 
private control. In general, the rule of laisser 
/aire has been the policy of our government in 
the past, and under it we have greatly pros- 
pered. The threatening evil of the present 
time, however, is an excess of legislation relat- 
ing to economic subjects. 

The second department of detrimental legis- 
lation named consists in the efforts to fix prices 
and rates, which must in the end be inevitably 
fixed by the law of supply and demand. From 
a superficial point of view, it might appear that 
some legislation of this kind would be benefi- 
cial, especially as applied to railroads. Whether 
correctly or not, the courts have decided in 
favor of the legality of State and national reg- 
ulation of the rates of freight and passenger 
service. As this decision must be accepted, 
the only question remaining is that of expedi- 
ency. It is urged that railroads are public 
highways, and that they have special privileges 
granted by their charters ; and for these reasons 



ECONOMIC LEGISLATION AND ITS LIMITS. 135 

they should be subject to governmental control. 
Quite an extensive test of this policy was 
made, a few years since, by the enactment, in 
several States, of what were known as " granger 
laws." Experience has proved that these laws 
were not only useless, but an injury to the 
public. It was only another of the oft-re- 
peated attempts to substitute the artificial for 
the natural. Without State interference, busi- 
ness policy and competition are each constantly 
forcing the rates for service towards the normal 
standard, or to such a point as is natural and 
fair. Take, for instance, the worst supposable 
case, — that of a road without any apparent 
competition, either by land or water. The 
popular estimate of such a road is that it is a 
"monopoly," and that its policy and interest 
will naturally cause it to make a tariff of high 
rates. A more careful examination of the case 
will show that it is against the true financial 
policy of even such a road to establish its rates 
above the normal point. Normal rates attract, 
foster, and increase both business and profits. 
Such a road, to be profitable, must adopt a 
policy that will encourage the location of man- 
ufactures, the development of agriculture, and 
the thorough settlement of the tributary terri- 
tory. Sagacious railroad managers are learn- 



136 NATURAL LAW IN TEE BUSINESS WORLD. 

ing that a large business at normal rates is far 
more profitable than a restricted traffic under a 
high tariff. In other words, they cannot afford 
to fix rates above the normal any more than 
below it. It is no doubt true that the man- 
agers of some roads have not fully realized 
the application of this general law ; but, as 
both experience and observation are persistent 
teachers, the general tendency is strongly in 
the direction of a normal standard. In numer- 
ous instances, roads have voluntarily reduced 
their rates, thereby realizing as a direct result 
an increase of business and profits. As equip- 
ments and appliances have become more per- 
fect, normal rates have steadily declined, and 
will continue to do so, regardless of legislation. 
Every reduction brings a great and unexpected 
increase of business. The problem before 
every railroad manager is to find as nearly as 
possible the normal point ; for that, in the end, 
is the most profitable. In proportion as tariffs 
are removed from it, either above or below, 
the profits will decrease. Artificial restrictions 
prevent the increase of competition and the 
building of new roads, as some of the "granger 
States" found to their sorrow, after the adop- 
tion of their "cast-iron" regulations. 

Some forty or fifty years ago, w assize laws " 



ECONOMIC LEGISLATION AND ITS LIMITS. 137 

were enacted in New York and some other 
cities, regulating the price and the size or 
weight of loaves of bread, based on the price 
of flour. After a trial, which was attended 
with much trouble and expense, in consequence 
of the necessity for numerous inspectors, the 
laws were repealed. Besides the saving of 
expense, it was found that the natural competi- 
tion Between bakers was much more effectual. 

The old usury laws furnish another notable 
example of attempts to fix artificial prices. As 
well regulate the height of the tides by statute. 
When the artificial comes squarely in conflict 
with the natural, as in this case, the latter will 
surely triumph sooner or later. 

A striking instance of misapplied legislation 
is seen in statutes to regulate the hours of labor. 
These have been advocated and urged by so- 
called labor reformers, and by labor organiza- 
tions. They have brought a very strong pres- 
sure to bear on legislators in favor of these meas- 
ures. When we look beneath the surface, and 
see their real effect, we can only be surprised 
that working men can be so blind to their own 
interests. Time is the one thing that all share 
alike. Unlike nearly everything else, the poor 
have the same amount as the rich. It is, in fact, 
the capital of the laboring man. By Natural 



138 NATURAL LAW IN THE BUSINESS WORLD. 

Law, he has his full time to dispose of as he 
may think best. But when he asks for an arti- 
ficial law, which will deprive him of the use of 
a portion of his own productive power, as by 
an " eight-hour law," he diminishes by so much 
his capital, and renders himself poorer. This 
is the real sum and substance of restrictive 
legislation, in regard to hours of labor, when- 
ever applied to adults. How unfortunate that 
American citizens should be so blind to their 
own interests as to deliberately beg to have 
their liberty and capital taken from them ! If 
legal enactments are needed to prevent men from 
selling their time when they wish to, it would 
logically follow that the State should control 
their eating and drinking, and what they should 
wear. It is a reflection upon the intelligence 
of the masses of the people to suppose that we 
have any considerable number of adult citizens 
who are so ignorant that they cannot decide for 
themselves how much to work. Moreover, 
even if their physical welfare would be pro- 
moted by shorter hours of labor, such legisla- 
tion would be of no advantage to them unless 
it were world-wide. If the eight-hour law 
prevailed in this country, and not in European 
countries, our manufacturers could not compete 
with theirs in the markets of the world. More 



ECONOMIC LEGISLATION AND ITS LIMITS. 139 



workmen, too, would be attracted to our shores 
in hopes of an easier time. And both these 
causes would force down wages. 

Legislation in regard to the frequency of 
payment of wages is clearly superfluous, though, 
perhaps, harmless except as a precedent. 

It is evident that every superfluous and un- 
necessary enactment decreases the respect for 
law, and lowers and cheapens the estimation of 
its justice and impartiality. 

The general demand by the masses for the 
widening of legislative functions, doubtless 
arises from a vague idea that, by some addi- 
tional enactments, production would be more 
equally distributed. For this reason, an effort 
is made to correct every petty grievance by 
additional law-making. Prosperity is to be 
gained by some legal panacea, instead of by the 
natural road of economy. and industry. The 
present time is prolific in those so-called politi- 
cal economists who advocate new and unique 
additions to our already cumbersome code. 
Ignorance of the very first principles of politi- 
cal science can only give rise to such visionary 
plans and theories. The "reformers" assume 
that all employers are blindly selfish, and that 
they try to lengthen hours and depress wages. 
On the contrary, it is for the interest of every 



140 NATURAL LAW IN THE BUSINESS WORLD. 

employer to pay good wages and make as short 
hours as competition and the nature of the busi- 
ness will warrant. Only by such a course can 
he retain his best help, who are always in 
demand, and get the highest quality of produc- 
tion. 

Business prospers in the absence of legal 
interference, except to simply provide for jus- 
tice and freedom. 

Bearing in mind the fact, before alluded to, 
that the expense is much greater when govern- 
ments, either municipal, State, or national, 
undertake the accomplishment of any object, 
even when honestly done, than is the case with 
individuals, it is obvious that their functions 
should not be increased except in cases of posi- 
tive necessity. It is true that the complex ar- 
rangements of modern civilization require State 
intervention in some ways unnecessary under 
more primitive conditions. The factory legisla- 
tion of England, and similar enactments in some 
of our States, are examples. An excess of 
liberty to some individuals may prove a tyranny 
to others. As the good of society is more 
important than the possible advantage of one 
of its fractional parts, the operations of the 'few 
must be restricted when they encroach upon 
the liberty of the many. In other words, the 



ECONOMIC LEGISLATION AND ITS LIMITS. 141 

natural law of liberty, as applied to society, is 
higher than that pertaining to the individual ; 
and, while they are not in opposition, the lower 
is modified by the higher. Thus, human law 
should indorse and supplement Natural Law by 
restricting personal will, when it conflicts with 
the will of society. This is compatible with the 
greatest average freedom for all the different 
members of the body politic. The primary 
obligation of the State is in the exercise of 
what are usually known as police powers. 
There are a variety of other proper functions 
which are more or less intimately connected 
with these primary duties of protection to per- 
son and property. We expect the State to 
enforce our contracts, regulate our sanitary 
conditions, prevent and punish frauds, abate 
nuisances, and ward off a variety of evils which 
threaten society. 

Among the examples of factory legislation 
which may be classed as wise and proper is 
State interference in behalf of children whose 
parents or guardians, through motives of cupid- 
ity, will not protect them from over- work. 
The same restrictions in regard to an adult 
would be superfluous and unwise, for he is 
responsible, and is supposed to be able to judge 
correctly as to what is best for himself. Be- 



142 NATURAL LAW IN THE BUSINESS WORLD. 

sides, if he is restricted in hours, it might mean 
for him less food and clothing, and a poorer 
home. Wholesome regulations relating to fire 
escapes, sanitary inspection, foul air, the fen- 
cing of dangerous machinery and elevator wells, 
are proper and necessary. They encroach upon 
no man's liberty, except the liberty to be 
injured, and private enterprise cannot be relied 
upon to regulate them. Individual cupidity 
and neglect must be controlled and overcome 
by higher supervision. Personal injuries, like 
libel, slander, or even bodily assault, must be 
punished by the State, for private punishment 
would result in disorder and anarchy. Per- 
sonal will must be subservient to collective will. 
Individual freedom mio'ht lead to the location 

o 

of a powder mill or glue factory in a thickly 
settled street, unless it was restrained by col- 
lective freedom. It is obviously within the 
province of the State to appoint boards of 
health and sanitary inspectors, whose duties 
shall, include the suppression of contagious and 
epidemic diseases, and the protection of air and 
water from pollution and contagion. As it is 
impossible for individuals to be universal 
experts, it is also necessary to have govern- 
ment inspectors to test weights and measures, 
to detect adulterations in foods and chemicals, 



ECONOMIC LEGISLATION AND ITS LIMITS. 143 

and also, in some cases, to brand those articles 
of commerce whose quality or quantity can- 
not be verified by ordinary observation. Or- 
ganized government has the power to aid and 
supplement the wisdom of the individual, with- 
out in any way restricting his independence, or 
deadening the competitive and elastic forces of 
the business world. The boundary lines be- 
tween State intervention and individual enter- 
prise must, to a certain extent, be determined 
by a wise expediency ; but the great end to be 
sought is, that private enterprise, activity, and 
competition shall be left wholly free and un- 
hampered. In the opposite direction lies the 
great danger of our time. Any unnecessary 
dependence on the government for objects 
obtainable by private effort is so clearly a viola- 
tian of Natural Law that bad results are sure to 
follow. 



WEALTH, AND ITS UNEQUAL DISTRIBUTION. 



" Order is Heaven's first laiv ; and this confessed, 
Some are, and must be greater than the rest ; 
More rich, more wise ; but icho infers from hence, 
That such are happier, shocks all common sense." 

Pope. 

" He heapeth up riches, and knoweth not who shall gather 

them." 

Ps. xxxix. 6. 

" High stations, tumults, but not bliss create, 
None think the great unhappy, but the great." 

Young. 

" Man wants but little here below, 

Nor wants that little long." 

Goldsmith. 

" A man he vms to all the country dear, 
And passing rich with forty pounds a year." 

Goldsmith, The Deserted Village. 



XI. 



WEALTH, AND ITS UNEQUAL DISTRIBU- 
TION. 

IT is a very common, but inaccurate saying, 
that the rich are growing richer, and the 
poor, poorer. This idea seems to be dominant 
in the minds of sentimental and socialistic 
writers, and is largely indorsed by popular 
opinion. The colossal fortunes that have been 
accumulated during the last twenty or thirty 
years attract wide attention, and the conclusion 
is reached that natural and economic laws are 
faulty, or else such marked inequality would 
not exist. Our sentimental preference is for an 
ideal condition of society in which uniformity 
is the prominent characteristic. That there has 
been a great change in the conditions for the 
rapid accumulation of wealth during the last 
generation is undoubtedly true. Prominent 
among the causes which have led to this move- 
ment, and which have made the accumulation of 
great fortunes possible, is the remarkable ex- 
pansion of our railroad system. The rapidity 
and extent of our railroad growth are unique, 
and are unprecedented in the world's history. 



148 NATURAL LAW IN THE BUSINESS WORLD. 

Within the last two or three decades, a section 
of territory larger than the aggregate area of 
all the States east of the Mississippi Kiver, has 
been permeated and developed by the construc- 
tion of these great public highways. The 
wealth that has been created by this means can 
only be estimated by thousands of millions. 
To illustrate this, let us suppose an individual 
case, and observe the special opportunities 
afforded for the accumulation of wealth by this 
great movement. A man with great ability to, 
organize and execute, and with wise forecast, 
possessed of experience and capital, grasps the 
boundless possibilities of a sparsely settled, 
and unproductive territory. He foresees that 
all that is necessary to transform these worth- 
less acres into fruitful farms, and dot them with 
flourishing towns and villages, is cheap trans- 
portation. He projects vast schemes of railroad 
building, and executes them, not as a philanthro- 
pist, but as a sagacious business man. He has 
faith in natural principles, which show him that 
the result of his venture will be a domain occu- 
pied by thousands of thrifty settlers, who will 
furnish his road with business. As a result of 
his energy and persistence, and in strict accord 
with Natural Law, his individual fortune is, 
perhaps, increased by millions, and he has 



WEALTH, AND ITS UNEQUAL DISTRIBUTION. 149 

earned his reward. Through his instrumen- 
tality, there has been added to the capital of 
the nation, not only the railroad, but many 
times its value in other products and improve- 
ments. Land, before worthless, becomes valu- 
able and productive. Instead of a scanty growth 
of sage brush, boundless fields of golden grain 
await the advent of the reaping machine. 
Where an occasional herd of buffalo was almost 
the only sign of animal life, numberless droves 
of cattle and sheep are now seen fattening for 
shipment, to supply the never-ceasing food 
demand of the world. In place of vast solitudes 
broken only by the passing of an emigrant train 
or Indian hunter, thousands of brawny farmers 
and laborers find employment and sustenance. 
This great result is the product of the brain force 
of one man. He has furnished occupation for 
thousands of workmen, who otherwise would 
have been left to overstock the labor market. 
By the amount of his production he has as 
fairly earned his millions, as any manual laborer 
has earned his daily wages. While his own 
fortune has been enhanced, he has indirectly 
caused a production many times greater. The 
transaction was only a sale of brain power, at 
such a price as the world was willing to pay. 
The case supposed is only illustrative, but it 



150 NATURAL LAW IN THE BUSINESS WORLD. 

is typical of many occurring in real life. In 
the accomplishment of such results, truth is 
indeed stranger than fiction. 

Other important means by which the oppor- 
tunities for making great fortunes have been 
multiplied, are found in the utilization of steam 
and electricity, and by the great number 
of inventions. These have changed business 
methods, and increased in almost geometric 
progression the practical power and possible 
achievement of a single individual. Great per- 
sonal ability, when supplemented by such forces, 
becomes almost irresistible. 

The era just past has been a transition period. 
The remarkable change in business conditions 
and methods has been so rapid, that compara- 
tively few had the foresight and courage to 
promptly grasp the golden opportunities as they 
were presented. They were never so numer- 
ous and prolific in any past period, and they 
furnished the special conditions by means of 
which, perhaps, nine tenths of the great fortunes 
have been gathered. Not only the building, 
but the operating, consolidating, systematizing, 
and, to some extent, the buying and selling, of 
these great highways, have contributed to the 
result. The flow of general capital into small 
enterprises of a profitable character is easy and 



WEALTH, AND ITS UNEQUAL DISTRIBUTION. 151 

rapid, but in great undertakings it becomes 
timid and suspicious. This has put a very high 
premium on unusual foresight and executive 
ability. 

The two great estates of Astor and Stewart 
are instances of great accumulation that have 
taken place outside of these special conditions 
and opportunities. They represent respectively 
the departments of real estate and commerce. 
The Astor estate furnishes, perhaps, the most 
conspicuous example in this country of what 
socialistic writers call "unearned increment." 
But is there practically any such thing? It is 
a natural law that any unusual opportunities 
for gain, will call out seekers and competitors. 
If the unearned increment is such a prize as we 
are told, why have not all, or at least more, 
sagacious men bought land? Simply because- 
they thought there were better investments 
elsewhere. A careful examination will show 
that, on an average, a fair interest on the money 
invested in land, plus taxes and assessments , will 
in the end amount to more than the so-called 
unearned increment. There are exceptions to 
this rule in rapidly growing cities and newly 
settled farming regions, but not more than in 
other kinds of enterprise. This socialistic bug- 
bear may be disposed of by suggesting that, had 



152 NATURAL LAW IN THE BUSINESS WORLD. 

there been any greater prospect of profit than 
in other average investments, the shrewd busi- 
ness men of America would have long; ago dis- 
covered it, and would have invested more in 
land and less in other objects and occupations. 
It is probable that even the Astor estate has paid 
out in taxes and assessments all the natural 
increase that has taken place, which is in excess 
of a fair rate of interest on their investments. 
Land must advance in value very rapidly to 
outstrip these combined charges. The Stewart 
estate is an example of what individual brain 
power, exerted in harmony with Natural Law 
and by its aid, can accomplish in the domain of 
commerce and traffic. 

The great fortunes that were made in mining, 
and m mining speculations, belong to an era 
that culminated several years ago. At present, 
anything but slow and gradual accumulations 
in this department is exceptional. 

In view of these facts, it seems evident that 
in most cases the great fortunes were incidental 
to the unique opportunities presented during 
the last two or three decades. If these special 
conditions were temporary in their character, 
the golden opportunities have largely passed, 
and fortune making in the future will be slower 
and more difficult. 



WEALTH, AND ITS UNEQUAL DISTRIBUTION. 153 

111 regard to railroad building, nearly all the 
available territory is now occupied by through 
or trunk lines, and in future this business will 
be more confined to the construction of short 
and comparatively unimportant feeders. The 
undeveloped territory of our own country is 
becoming more limited. This will narrow what 
has been a most prolific field for the rapid en- 
hancement of capital. 

It also seems improbable that we can expect 
any such radical progress in inventions and 
business methods from the present starting- 
point, as has been made m the past few decades. 
Better appliances, and a nearer approach towards 
perfection in the application of steam and elec- 
tricity, will no doubt be reached ; but unless 
some new r motor, or some means of aerial nav- 
igation is discovered, it is impossible to conclude 
that future improvements will be as radical as 
those of the last half-century. When a ton of 
grain can be carried from Chicago to New York 
for less than it costs to cart it across either city, 
it is evident that the process cannot be greatly 
improved. 

Again, as wealth has accumulated, the com- 
petition of capital with capital has become more 
intense. Interest, or the selling rate for the 
use of capital, has declined nearly sixty per 



154 NATURAL LAW IX THE BUSINESS WORLD. 

cent. It has gradually fallen from the old 
standard of six per cent, to a point which 
makes it probable that a two and a half per 
cent, government bond could be floated at 
par. If the value of wealth be estimated on 
the basis of its earning power, a million of 
dollars is now worth less than one half that 
amount twenty-five years ago. Competition 
between investors is so great that almost any 
railroad, which pays six per cent, dividends on 
its stock, is in danger of being paralleled. 

The general evenness of prices consequent 
upon telegraphic communication and rapid 
transportation is another instance of the lessen- 
ing opportunities for great gains by speculative 
investments. Important changes in market 
prices are discounted long in advance, and are, 
therefore, very gradual. Price fluctuations be- 
ing smaller, successful corners and manipula- 
tions become more difficult and infrequent. 

The laws of inheritance are also great and 
constant forces working toward the disinteora- 
tion and distribution of great estates. In this 
country, with no law of primogeniture, and 
where, as a rule, there are several heirs to each 
estate, its dissolution as a great unit becomes 
very probable. The Stewart estate, before 
alluded to, is an example. The longest life is 



WEALTH, AND ITS UNEQUAL DISTRIBUTION. 155 

not sufficient for a single individual to absorb 
more than a minute fraction of the wealth of 
the community, and, whether more or less, the 
probabilities are that at his death it will cease 
to continue as an organized, accumulative force. 

The laws of heredity are also powerful in 
their wealth-dispersing tendency. While there 
are exceptions, the sons of very rich men do 
not commonly inherit the peculiar brain force 
which characterized their fathers. The domi- 
nant and controlling talent is generally greatly 
modified in the son. Instead of a financier, 
inclination may lead him to become an artist or 
a professional man, or still oftener, a gentle- 
man of leisure. In place of the habits ac- 
quired by a saving and economical discipline, 
are those of an extravagant and luxurious 
character incident to his position. He begins 
where his father left off; and, in many cases, 
ends where his father began. Not only the 
exceptional talent is lacking, in most cases, but 
the still more necessary impelling motive. 
Most of our millionaires started in life poor, 
and were obliged to exercise self-denial and 
abstinence, which laid the foundation for their 
future success. 

Statistics show that the average life of capi- 
tal is not equal to the average life of man. It 



156 NATURAL LAW IN THE BUSINESS WORLD. 

is a prevalent idea that the success which has 
attended the efforts of the few $ is due, in a 
great degree, to chance or luck, but this is a 
mistaken view. Favorable environment is im- 
portant, but exceptional brain power, bringing 
to its aid the principles of Natural Law, im- 
proves and transforms its surroundings. The 
character of environment, therefore, becomes 
largely a matter of choice, rather than fixed and 
uncontrollable. 

The general individual average of wealth is 
higher at present than at any previous time, 
in consequence of the special causes already 
enumerated. It also seems probable that the 
passion for wealth, which has caused so much 
unfavorable comment by writers of other 
nationalities, will diminish as conditions be- 
come more fixed and opportunities for rapid 
gain fewer. The fact that the amount of 
human happiness has but little connection with 
the amount of wealth possessed by individuals, 
will become better appreciated. National life 
and character have hardly had time to become 
adjusted to the changed conditions brought 
about by the rapid expansion before noticed. 

We have shown that all classes, including 
the poorest, are greatly benefited by the opera- 
tions of capital. For illustration, the immense 



WEALTH, AND ITS UNEQUAL DISTRIBUTION. 157 

fortunes of Vanderbilt and Jay Gould repre- 
sent most largely individual wealth in railroads 
and telegraphs. The fact of personal owner- 
ship, with its income of four or five per cent, 
on the investment, makes no difference with 
the great balance that goes directly to labor for 
service and materials. Every laborer gets as 
much as if the property belonged to ten 
thousand stockholders, instead of largely to 
one. This fact also makes no difference with 
the productive power of capital in performing 
the multiform functions of society and com- 
merce. If there is a difference in either direc- 
tion, the organization and operation are usually 
more perfect under concentrated control. But, 
aside from these great public enterprises, there 
are investments of a private nature, and in the 
domain of art and luxury. The palace of the 
rich may excite the envy of the passing 
laborer, but its value in money has already 
been disbursed to the mechanics who labored 
in its construction. Every piece of material 
has been changed, shaped, and fitted from its 
condition as raw material by busy workmen, 
who have thereby had occupation and sub- 
sistence. 

The great and mischievous fallacy which 
forms the basis of all the socialistic literature 



158 NATURAL LAW IN THE BUSINESS WORLD, 

and sentiment may be summed up in a single 
sentence, viz., that all wealth is created by 
labor, and, therefore, belongs to the laborers 
ivho have produced it. This plausible propo- 
sition, which seems so logical and convincing, 
may also be disposed of as briefly. The 
wealth does belong to the labor that produced 
it, but the largest and most valuable part of this 
teas mental labor. The socialists ignore brain 
labor, which, by Natural Law, is the more 
important of the two. The large number of 
clergymen, philanthropists, and benevolent and 
sentimental people, who have been favorably 
impressed by some apparently humane and 
attractive features of socialism, have over- 
looked this point. The typical European 
socialist is intelligent and logical. He is a 
materialist, and does not believe in mind 
except as being a manifestation of matter. He 
therefore ignores mind as a factor in pro- 
duction. Even economists of the school of 
Smith, Mill, and Ricardo, gave little attention 
to the great part played by brain force in 
general production. Their observations were 
made prior to the present era of great inven- 
tion, when the influence of mental power was 
not so predominant. The theory that mental 
effort is not labor, is too shallow to merit serious 



WEALTH, AND ITS UNEQUAL DISTRIBUTION. 159 

consideration. Is not the finished edifice as 
much the work of the architect as of the mason 
or carpenter? Does not a student, clergyman, 
merchant, or an inventor labor? On the sup- 
position that wealth is the product of physi- 
cal labor only, some machines would have a 
very large value as measured by man power. 

Under a government like ours, where all 
enjoy equal rights, it is a malicious proceeding 
to foment class feuds and arouse envious pas- 
sions. It is an abuse of liberty, and its fruit 
is tyranny. 

During the time in which capital has de- 
creased fully sixty per cent, in earning power, 
there has been an increase in the productiveness 
of labor. By consulting the tables published 
by Mr. Edward Atkinson, whose accuracy as a 
statistician cannot be questioned, we find the 
following result : In the State of Massachu- 
setts, wages averaged twenty-five per cent, 
higher in 1885 than in 1860. During the same 
period, the purchasing power of money, as 
measured by the prices of two hundred of the 
most common and necessary articles, also in- 
creased twenty-six per cent. This shows that 
the purchasing power of the laborer's wages is 
fifty-seven and a half per cent, greater than 
twenty-five years ago in the State above men- 



160 NATURAL LAW IN THE BUSINESS WORLD. 

tioned, which is probably a fair example in 
this respect. As the result of an analysis of 
labor classification, Mr. Atkinson arrives at the 
conclusion that not more than ten per cent, of 
all who do the work of the country, intellect- 
ual, distributive, and manual, have accumulated 
an amount of property upon the income of 
which they can live without personal exertion. 
In concluding a recent statistical article in the 
Century magazine, he says, " Can it be denied 
that labor, as distinguished from capital, has 
been and is securing to its own use an increas- 
ing share of an increasing product, or its equiv- 
alent in money?" 

The aggregate production is much larger, 
and society richer, by reason of the fact that, 
in accord with Natural Law, labor is intelli 
gently directed and thoroughly organized by 
the brain power of capital. 



CENTRALIZATION OF BUSINESS. 



"All roads lead to Borne" 

"For he that hath, to him shall be given." 

Mark iv. 25. 

"Even there, where merchants most do congregate." 
Shakespeare, Merchant of Venice, Act. I., Sc- 3. 



A 



XXX. 

CENTRALIZATION OF BUSINESS. 

NY careful observer, who has watched the 
currents of trade in the great commer- 
cial centres for some years past, could not have 
failed to notice a constant tendency towards 
centralization. This movement has been de- 
cided and general. It has prevailed not only 
in American cities and towns, but is also seen 
in other countries. These facts prove that it 
is not in consequence of local or special causes, 
but the result of influences which operate uni- 
formly in obedience to Natural Law. This 
conclusion is further confirmed by the fact that 
it has not been caused by, nor in any way con- 
nected with legislation. We therefore con- 
clude that it is a necessary feature of the 
present great development of invention and 
civilization. There is so much sophistry pro- 
mulgated at present on the subject of " gigantic 
and dangerous monopolies," that it is worth 
while to trace out the working of the natural 
economic laws which have produced these con- 
ditions, and also their legitimate result. This 



164 NATURAL LAW IN TEE BUSINESS WORLD. 

is an era of monopolies. The fact that a few 
great firms or corporations in each city, and in 
each department of business, are able to attract 
a very large and increasing share of the aggre- 
gate patronage of the public, is patent to every 
observer. The Scriptural declaration, that 
w whosoever hath, to him shall be given," is 
being literally carried out. For illustration, 
look at the retail dry-goods trade in any of our 
large cities. Years ago, this business was done 
by a large number of small or moderate sized 
establishments, scattered in different quarters 
and neighborhoods. At the present time, the 
great part of this business is done by a few 
colossal establishments. These great institu- 
tions, in many cases, have added building after 
building, and department after department;, 
until their proportions are of astonishing mag- 
nitude. All other departments of trade are 
more or less under the control of the same nat- 
ural tendencies. There is also a process of 
centralization in locality, no less marked. The 
larger cities, owing to their greater facilities 
and attractions, and to the ease and rapidity of 
communication, draw business from the smaller 
places which was formerly under home control. 
In addition to this, there is a decided grouping 
of each kind of business in each city in some 



CENTRALIZATION OF BUSINESS. 165 

special locality. There is a dry-goods quarter, 
a banking quarter, and one for almost every 
other leading department of business. Con- 
centration in locality is added to centralization 
of capital and enterprise. 

The operation of this law in connection with 
manufacturing is also uniform and strong. 
New industrial centres are formed in conform- 
ity with natural conditions and advantages. 

Another manifestation of centripetal law .is 
seen in the growth of cities. At distances 
somewhat uniform, where railroad systems 
converge, great commercial centres grow up, 
each having its quota of tributary territory. 
Their location and growth are not a matter of 
chance, as many suppose, but are entirely in 
accordance with fixed laws. When one point 
gets a fair start in advance of its competitors, 
like a larger magnet, it has increased drawing 
power. Its attractive force increases in greater 
ratio than its growth. It seems to gain a kind 
of momentum, so that any city of given size 
has fourfold greater growing qualities than one 
half as large. While the lesser may increase 
somewhat, it naturally pays tribute to the 
greater. This is as irresistible as the law of 
gravitation. The centralizing force that locates 
special kinds of business in special places 



166 NATURAL LAW IN THE BUSINESS WORLD. 

is also well defined. The milling industry 
of Minneapolis, the packing of Chicago, the 
importing of New York, are examples. Manu- 
facturing, though not so thoroughly confined to 
single places, has its focal points : as Pitts- 
burgh in iron, Lowell, Lawrence, and Fall 
River in cotton, Paterson in silk, and Trenton 
in pottery. 

At first glance, it looks as though this condi- 
tion of things, especially as relating to great 
mercantile concerns, was abnormal and inju- 
rious. Admitting that it has aspects of this 
kind, let us carefully examine its results. 
Imagine a typical American city, with half a 
million population. Twenty-five years ago, its 
retail dry-goods business was done by a large 
number of small shops in different localities. 
Now it is largely monopolized by half a dozen 
mammoth establishments located almost side by 
side. What is the effect of this condition of 
things on the general public, comprising say 
four hundred and ninety-five thousand out of 
the half-million people? They show by their 
action that (unless they are greatly deceived) 
they can find lower prices, greater varieties, and 
better selections at these great establishments 
than elsewhere. We are obliged to accept this 
opinion of the great majority of an intelligent 



CENTRALIZATION OF BUSINESS. 167 

public as conclusive. This disposes of ninety- 
nine hundredths of the entire population. The 
next class, perhaps five thousand persons, who, 
under former conditions, would be in business 
for themselves, are now either junior partners, 
or employed on salaries by these great firms. 
They lose the net difference, whatever that may 
be, between the two following positions : on the 
one hand, greater independence and the dignity 
of proprietorship, but accompanied with uncer- 
tainty of success ; and, on the other, sure, but 
moderate success, with more dependence. The 
fact that but a small proportion of men succeed 
when in business for themselves, as shown by 
statistics, will still reduce the net difference so 
much that, even with this small class, it is 
doubtful which way the advantage would lie. 
These two classes comprise everybody except 
the great firms themselves, whose interests it is 
not necessary to consider. These great institu- 
tions have attained their prominent positions by 
a regular system of evolution, and are fair illus- 
trations of the ''survival of the fittest." Given, 
a rare combination of capital, executive ability 
and power to organize, with favorable environ- 
ment, and we have the conditions of increase 
almost without limit. 

In tracing still further the operation of these 



168 NATURAL LAW IN THE BUSINESS WORLD. 

laws, let us, for illustration, select two great 
monopolies, which are, perhaps, popularly re- 
garded as the most obnoxious of any in this 
country, viz., the Western Union Telegraph 
Company and the Standard Oil Company. It 
must be understood that no defence or indorse- 
ment is intended of the various means they 
have used, which have contributed to their 
present prominence. It is not their private 
transactions, but their relations to the general 
public, that we are now considering. No one 
is forced to have business relations with them, 
unless he does it of his own free will, and con- 
siders it for his interest. It is in their business 
relation with the public, as sellers of tele- 
graphic facilities and of oil, that we now look 
at them ; for they have no power otherwise to 
injure the average American citizen. What is 
now the Western Union Telegraph Company 
was formed, as nearly every one is aware, by 
the consolidation of smaller companies and the 
absorption of rival, but weaker organizations. 
They were willing and ready to be ?? absorbed," 
and were well paid for the operation. The 
prevalent impression is, that because this busi- 
ness is almost entirely controlled by one great 
organization, it necessarily becomes a danger- 
ous and powerful monopoly against which the 



CENTRALIZATION OF BUSINESS. 169 

public has no protection. This prejudice against 
all great corporations is a characteristic of the 
present time. There may_ be more danger in 
the prejudice, or what may come of it, than 
in the organizations themselves. 

Our safety consists in the fact that the nat- 
ural laws of supply and demand are sovereign, 
and that there is no danger of their repeal or 
suspension. What are the practical facts relat- 
ing to the telegraph company? It is a seller 
of telegraphic facilities, and the public, which 
represents demand, holds the key of the situa- 
tion. The company can afford to sell its ser- 
vices at a lower rate than half a dozen smaller 
ones could possibly do. Will it? Yes, in the 
long run ; for self-interest will force it in that 
direction. There is what may be called a nor- 
mal rate for this service, and, in case the man- 
agement try to fix prices much above this point, 
demand falls off and profits shrink with as 
much certainty as they w^ould in case they were 
put below it. Managers of corporations do 
not always discover at once how low normal 
rates are, and that they are always the most 
profitable ; but experience is a persistent 
teacher, and these law r s are continually pressing 
in the right direction, until they vindicate them- 
selves and obstructions are removed. Anillus- 



170 NATURAL LAW IN THE BUSINESS WORLD. 

tration of the operation of natural laws in 
governing demand, is seen in the effect of suc- 
cessive reductions in the rate of postage. 
Every experiment made by the government in 
this way has been successful. The increase 
of business that followed each reduction w^as 
so great, that but a very short time elapsed 
before the net revenue was larger than before. 
The true normal rate may still be a little below 
any point yet reached. Let us examine briefly 
the other typical monopoly. The business 
methods of the Standard Oil Company have 
perhaps received more severe criticism than 
those of almost any other corporation in the 
country. But it is difficult to see how even 
this overgrown giant can injure either the pri- 
vate citizen or the government. It is a colos- 
sal producer of oil, but is obliged to go into 
the open market and sell its product at just 
what consumers will give for it, and cannot get 
an eighth of a cent a gallon more than the reg- 
ular market price. In fact, besides giving 
employment at good wages to thousands of 
working men, it is probable that, by use of its 
great facilities, capital, pipe lines, etc., the 
millions of consumers are getting oil at a little 
lower price than would be the case if this 
admitted monopoly did not exist. It would 



CENTRALIZATION OF BUSINESS. 171 

seem then, that if this extreme and exagger- 
ated consolidation is powerless for evil, and 
hedged in by supply and demand, ordinary 
aggregations of capital are not only harmless, 
but have their uses and benefits, and are indis- 
pensable to society as at present organized. 

The fact that railroad or telegraph corpora 
tions have, or have not, " watered their stocks," 
is popularly supposed to have a great influence 
on their rates of service. Not in the least. 
If, for any speculative reason, the stock of 
the Western Union Telegraph Company was 
largely increased or diminished in its nominal 
amount, the management would find that it 
would be entirely inexpedient to change its 
tariffs for that reason. Its natural facilities 
would remain as before, and so would the de- 
mand for their employment. In other words, 
the normal point of greatest business and prof- 
its would remain the same, regardless of 
changes in the nominal amount of stock. 

We have considered these extreme eases of 
monopoly, not because we admire or defend 
them, but only because they furnish another 
illustration of the supremacy of Natural Law. 
They may be powerful enough to influence legis- 
lation, but they cannot change natural prin- 
ciples. Their business methods, and dealings 



172 NATURAL LAW IN THE BUSINESS WORLD, 



with rivals and competing organizations may 
have been indefensible, but unvarying natural 
conditions will make them powerless to harm 
the humblest American citizen. They cannot 
force demand for their products, but only 
court it. 

We are led to conclude that the menace to 
government and citizens by great business 
combinations is much overrated. Without 
regard to legislation, Natural Law hedges them 
in on every side. Its pressure also against all 
artificial rings and combinations is steadv and 
strong, and it is with difficulty they can be 
maintained for any length of time. While 
great aggregations of capital, in their opera- 
tions, are subject to many abuses, they are 
great forces in production, and have an impor- 
tant place in the economic functions of society. 



ALTERNATIONS OF PROSPERITY AND 
DEPRESSION. 



" There is a tide in the affairs of men, 
Which, taken at the flood, leads on to fortune; 
Omitted, all the voyage of their life 
Is bound in shallows and in miseries. 
On such a full sea are we now afloat ; 
And vj e must take the current ivhen it serves, 
Or lose our ventures." 

Shakespeare, Julius Ccesar, Act IV., Sc. 3. 

" The time is out of joint." 

Hamlet, Act I., Sc. 6. 

rt One extreme follows the other." 

" Every white will have its black, 
And every sweet its sour." 

Sir Carline. 



175 

xm. 

ALTERNATIONS OF PROSPERITY AND 
DEPRESSION. 

rpHE course of commerce and trade is very 
uneven. The alternations of what are pop- 
ularly known as good times and hard times, are 
familiar to the most casual observer. Are 
these recurrences of expansion and contraction, 
prosperity and panic, governed by fixed laws, 
or are they largely matters of chance and cir- 
cumstance ? If fixed and unvarying principles 
control, and have intimate connection with 
them, any study of such relations cannot fail to 
be profitable and interesting. The natural law 
of action and reaction is general in its applica-' 
tion, and in no way limited to the business 
world. The floods of springtime are followed 
by the droughts of summer. After great activ- 
ity, comes rest and quiet; after elevation, de- 
pression ; after light, darkness. 

If we soar above the normal business level at 
one time, w T e shall certainly fall below it at 
another ; and the higher the flight, the more 
rapid and great will be the descent. The 



176 NATURAL LAW IN THE BUSINESS WORLD. 

greatest panics are always preceded by the 
most intense activity and speculation. These 
violent changes are disastrous to all industrial 
interests. Steady and even progress is con- 
ducive to solid prosperity, while unhealthful 
activity is generally deceptive. 

What are some of the leading causes and 
conditions which naturally precede a business 
climax, and its succeeding panic and stagna- 
tion ? The fundamental and primary condition 
which results in panic may be expressed in one 
word, — debt. In itself, debt is not necessarily 
an evil, but its abuse is the troublesome ele- 
ment. An experience of profit leads to larger 
ventures, and these, being successful, to still 
larger, until both individual and collective in- 
debtedness grows to great proportions. When 
the crisis comes, all wish for what is due them, 
and but few are able to pay. Money becomes 
scarce and abnormally valuable, and produc- 
tions of every kind unsalable, except at great 
sacrifice. Business is therefore paralyzed ; for 
all are anxious to sell, and none wish to 
buy. No human prudence can entirely pro- 
vide against these convulsions, but a study of 
their laws and causes may do much to mitigate 
their severity. A money market always even 
and in perfect health, would imply the preva- 



PROSPERITY AND DEPRESSION. 177 

lenc.e of an almost infallible wisdom, which is 
nowhere found. 

In times of intense business activity, the fuel 
is being gathered, stick by stick, and added to 
the pile which is to produce the coming confla- 
gration. When the conditions are ripe, only a 
spark is necessary to bring general disaster. 
The proud fabric which has been gradually ris- 
ing, and whose stability was unquestioned, is 
dissolved with appalling suddenness. 

The tulip mania in Holland, which occurred 
in 1636-7, is a striking illustration of the possi- 
ble intensity of speculation and succeeding panic. 
A single root was sold for thirteen thousand 
florins. The ownership of a rare bulb was 
often divided in shares, and many were sold for 
future delivery by people who did not possess 
them, and often when the article sold was not 
in existence. The crash came without warn- 
ing, and was most disastrous and complete. 
The result was not due in any degree to bank- 
note expansion, as Holland at that time had 
only a coin currency. 

Laudable undertakings, if overdone, may 
issue in panic. The London South Sea Bubble, 
and some of the railroad panics of America, 
are examples. They are an evil which no 
monetary system, however sound, can prevent, 

)2 



178 NATURAL LAW IN THE BUSINESS WORLD. 

and governmental measures are also futile to 
avert them. With the natural human desire 
for rapid gain, and convenient facilities for 
speculation, over-trading is a sure result. It is 
a peculiar feature that those most actively en- 
gaged are less capable of judging of the danger, 
and the probable time of culmination, than 
those who look on from the outside. An ob- 
server, even in another country, will often dis- 
cover signs of approaching catastrophe which 
are overlooked by active participants. 

Every important panic is preceded by several 
years of prosperity, which at length reaches a 
feverish and unhealthy stage. Industry and 
economy are at a discount, and slow gains un- 
satisfactory. Production diminishes as specu- 
lation increases. Banks expand their circula- 
tion and discounts, and individual and public 
credits are also enlarged. Confidence is strong, 
and profits rapid and large. But at length a 
day of reckoning comes. Some unexpected 
weak spot in the financial fabric gives way, and 
every part comes down, as a row of standing 
bricks are levelled by the fall of one. Distress, 
bankruptcy, and liquidation follow, and after a 
few months, or years, the rubbish is cleared 
away, and a slow and tedious process of recu- 
peration sets in. Economy again becomes the 



PROSPERITY AND DEPRESSION. 179 

rule, and extravagance the exception. If the 
pendulum swung far and long in the direction 
of wild speculation, it will go with an equal 
momentum to the side of depression and stag- 
nation. 

Our most notable panics occurred in the years 
1822, 1837, 1857, and 1873. Others, of much 
less intensity, somewhat different in character, 
in 1861, 1866, and 1869. That of 1837 was, 
perhaps, the most severe in its immediate re- 
sults, and the most lasting in its after effects. 
It was ten years before values fully recovered 
and business resumed its normal activity. The 
principal antecedents were a great expansion of 
banking and bank credits, and an intense spec- 
ulation in real estate, especially in New York 
City. In 1830 there were three hundred and 
twenty-nine banks in the country, with a capital 
of $110,000,000. In 1837 they had increased 
in number to seven hundred and eighty-eight, 
with a capital of $290,000,000. Prices of all 
commodities advanced rapidly, and industry and 
frugality were at a discount. Many abandoned 
agricultural pursuits and removed to towns or 
cities, to speculate in real estate and enjoy their 
rapidly increasing riches. At length the climax 
was reached, and the succeeding crisis occurred 
on May 10, 1837, Careful estimates subse- 



180 NATURAL LAW IN THE BUSINESS WORLD. 

quently made showed an actual shrinkage in 
value of the assets of the country of two bill- 
ions, and an amount of indebtedness wiped out 
by actual bankruptcy, of six hundred millions. 
Complete specie resumption by the banks in all 
the States did not take place until 1843. Thou- 
sands, who thought themselves wealthy, lost 
all, and had to make a new beginning without 
a dollar. Labor was a drug, and all property 
unsalable, except at ruinously low prices. Val- 
ues sunk as much too low as they had before 
been too high. Recovery was very slow and 
difficult. It required years of toilsome effort to 
ascend the same hill that had been descended at 
a single leap. 

The panic of 1857 was, perhaps, next in se- 
verity, and the preceding conditions were very 
similar. The influx of gold from California, 
after its discovery in 1848, was added to the 
other speculative elements, and its effect was to 
intensify the passion for rapid gain. The se- 
vere object lesson of twenty years before had 
been forgotten, and history repeated itself. 
The prostration was not as severe, and the re- 
covery more rapid than before ; but yet the dis- 
aster was great, and thousands of fortunes were 
swept away. The suspension of specie pay- 
ments by the New York banks, however, lasted 



PROSPERITY AND DEPRESSION. 181 



only fifty-nine days. Kecovery to the normal 
standard of business and prices was not quite 
complete in 1860, when the great political events 
occurred which led to the civil war of 1861. 
The opening of hostilities produced violent 
changes and irregularities in our banking sys- 
tem, which precipitated a crisis in the currency. 
This was quite unlike the panic of 1857, and 
much less severe. The bonds of various South- 
ern States had been largely used in the North as 
a basis for bank circulation, and as their value 
rapidly declined, great confusion in our mone- 
tary system followed. Financial operations 
and exchanges were much disturbed, until the 
exigencies of the war forced the government to 
issue the greenback currency, which soon took 
the place of State bank issues. We are dealing 
with principles, and not history, and will only 
briefly notice these monetary changes and their 
effects. As the war progressed, the redundancy 
of.paper currency increased, and soon caused it 
to sink below a gold basis. This movement 
grew still more pronounced when the national 
banking system was inaugurated, which was 
another outgrowth of the financial needs of the 
government. It was devised to aid in making 
a market for government bonds, which were 
made a basis for national bank circulation. 



182 NATURAL LAW IN THE BUSINESS WORLD. 

These issues, added to those of the government, 
caused a still further depression from a specie 
basis, until at one time their value was less than 
half that of gold. A corresponding inflation in 
all prices occurred, as rapidly as an adjustment 
could take place, and speculation was the natural 
accompaniment. As the volume of currency 
increased, its purchasing power diminished. 
Supply and demand must come to an equi- 
librium. There was, however, but little change 
in prices when measured by the gold standard, 
the apparent increase in values being in reality 
fictitious and artificial. Those who were saga- 
cious enough to keep their assets largely in 
commodities during the expansion, profited, in 
case they turned them intG money before the 
contraction. Thus, we meet the law of supply 
and demand at every turn, always uniform and 
supreme. The legislation of the Medes and 
Persians bears no comparison to this principle 
in unchangeableness. The quantity of circu- 
lating medium in any country has a direct rela- 
tion to the price of its commodities. 

The circumstances preceding the panic of 
1873 were somewhat different from those 
before noticed. Its most prominent cause was 
an abnormal amount of railroad building. 
This is a laudable business, but it is quite 



PROSPERITY AND DEPRESSION. 1 83 

possible to overdo it. There was also an 
unusual amount of real-estate speculation, and 
consequent inflation of prices. Whatever single 
feature may be the more direct cause of any 
panic, its effects spread to other enterprises, no 
matter how different their character. As a con- 
sequence, other values suffered nearly as much 
as those of railroad stocks. 

By means of debt and inflation, current 
values of fixed forms of property became too 
great in proportion to the existing volume of 
real money. The disparity increases until 
panic comes, which merely consists of an 
excited bidding for money, by those who must 
dispose of surplus property. In their com- 
petition for money they offer an increasing 
quantity of commodities for it, which is called 
a fall in prices. A given sum in this way 
becomes more valuable, as measured by other 
property, in accordance with supply and 
demand. Wherever we turn in the business 
world, this ubiquitous principle is there before 
us. The potency of legislation is weak in 
comparison. 

It is probable that the panics of the future, 
will be less severe than those of the past. 
Present business methods and conditions make 
it almost certain that no such convulsions as 



184 NATURAL LAW IN THE BUSINESS WORLD. 

those of 1837 and 1857 will again occur. 
Rapid communication tends powerfully toward 
world-wide evenness of prices, and promotes 
the gradual discounting of what would other- 
wise be violent fluctuations. There is also a 
growing sentiment against excessive individual 
indebtedness, and business is more generally 
conducted on a cash basis. International com- 
merce also conduces to steadiness of prices, 
and any abnormal prosperity or depression 
in one country, receives a corrective influ- 
ence from other countries. There is a better 
understanding of Natural Law, and a more 
general appreciation of the certainty of the 
penalties for its violation. When all are 
familiar with unerring natural principles, and 
have confidence in their continuous operation, 
they will become less susceptible to impulses 
of fear and unreasoning panic. When a 
crisis is at hand, and exciting and disquieting 
rumors prevail, even the strongest some- 
times lose their equanimity and reasoning 
power. Anything like a stampede in the 
financial world is most disastrous. Reas- 
suring influences are very necessary at such 
times. Often a firm and united stand taken by 
the banks, with mutual assistance when neces- 
sary, accompanied by a temporary increase 



PROSPERITY AND DEPRESSION. 185 

of discounts, will alleviate the worst features of 
a sudden financial crisis. A subsequent stead} r 
and slow contraction on the part of the banks, 
after the first excitement subsides, will gen- 
erally take place, to conform to the changed 
business conditions. The greatly increased 
general foresight in determining the future ten- 
dency of market prices will do much to prevent 
any repetition of severe panics, for dangers 
foreseen can be largely avoided. Steady and 
even markets do not present good opportunities 
for speculation and rapid accumulations by the 
unscrupulous, but are favorable for labor, and 
all legitimate business and industry. 



EAILEOADS, AND EAILROAD CONSOLIDATION. 



"No pent-up Utica contracts your powers, 
But the vjhole boundless continent is yours." 

Sewall. 

"Facility of communication in social, commercial, and 
political intercourse is a distinguishing index of civilization ." 

" Let observation, with extensive view, 
Survey mankind from China to Peru." 

Samuel Johnson, 1709-1784. 



XIV. 

RAILROADS, AND RAILROAD CONSOLIDA- 
TION. 

rpHE natural law of progress toward civili- 
zation and social development is by way 
of communication and transportation. These 
necessary advantages can only be secured by 
means of roads. A road is a symbol of civili- 
zation, and the lack of one, an evidence of 
barbarism. In countries without facilities for 
travelling from place to place, the people are 
poor and ignorant, and the government unciv- 
ilized and unstable. The road is the physical 
index of the character and cultivation of any 
age or people. It is, therefore, in accord with 
Natural Law, that the presence or absence of 
roads indicates a dividing line between two 
diverse conditions of society. When the So- 
man Empire was at the height of its power and 
grandeur, it was distinguished for its roads, 
and all led to Rome. Portions of the famous 
Appian Way, built three hundred years before 
Christ, remain to the present time. It was 
over three hundred miles in length, spacious, 



190 NATURAL LAW IN THE BUSINESS WORLD. 

and smoothly paved with hewn stone blocks, 
laid in cement. Numerous other roads, equal 
in character to our best city streets, diverged 
from Rome for thousands of miles, to the most 
distant parts of the empire. Mountains of rock 
were tunnelled, and rivers and ravines were 
spanned by massive stone bridges, over which 
her invincible legions could march without in- 
terruption, while she was mistress of the world. 
These great works were so substantial that 
fragments of them still remain, notwithstand- 
ing the disintegrating influences of the frosts 
and floods of twenty centuries. In contrast, 
the feudal age of comparative barbarism was 
destitute of highways, and had no facilities for 
communication. The baron of old England, 
or on the Rhine, who ruled the adjacent region, 
perched his castle on inaccessible heights. He 
built no roads *or bridges, for communication 
w^as not sought. Wheeled vehicles were un- 
known, except a few of the rudest sort, and all 
travelling was done on foot, or on horseback, 
through fields, forests, and streams. Then 
there could be no social or mental progress, no 
commerce, no activity. JSTo industrial develop- 
ment or advance was possible, for lack of chan- 
nels. By natural law, friction produces heat; 
so intercourse and intercommunication excite 



RAILROADS, AND THEIR CONSOLIDATION. 191 

mental activity, and stimulate art, science, and 
invention. Nothing has so contributed to dis- 
pel the lethargy of ages, and to quicken the 
current of investigation, as the invention and 
utilization of the steam engine. 

Even turnpikes were not constructed in Eng- 
land until the early part of the last century, 
and the first English canal was dug as late as 
1760. The yearly movement of merchandise 
on al he through land routes of the world a 
century ago, would not equal that of one of our 
great trunk lines of the present time. Long- 
distance transportation by land, except for the 
most concentrated and valuable products, is 
entirely a thing of the present. We are more 
inclined to look at the present and future, but 
a brief retrospect is sometimes interesting and 
profitable. Not till 1833 was there a daily 
mail between London and Paris. The English 
postage on foreign letters was from twenty- 
eight to eighty-four cents, besides the foreign 
rates and ship charges to be paid by the receiver. 
On inland letters, at the same time, the postage 
was twenty cents per sheet. In our. own coun- 
try, up to 1845, inland rates were from six 
to twenty-five cents, according to distance. In 
1851, a reduction was made to a uniform rate 
of three cents per half-ounce. Not only mod- 



192 NATURAL LAW IN THE BUSINESS WORLD. 

ern commerce, science, and literature depend 
upon easy and rapid communication, but even 
free government, except on a small scale, could 
not exist without it. Union of sentiment is 
indispensable to its continuance, and modern 
facilities of intercourse alone can secure it. The 
people of a vast territory, like our own, are 
more thoroughly assimilated and unified than 
was possible a century ago with those of a 
single State. The far-away provincial towns 
become almost like suburbs of the metropolis. 

We soon become accustomed to modern facil- 
ities, and take them as a matter of course, 
and regard their usefulness with indifference. 
Not only so, but we often become exacting, 
impatient, and almost unreasonable in our de- 
mands upon them. The prairie farmer, who 
used his corn as fuel, for lack of transportation 
and a market, soon forgets his experience, and 
is dissatisfied with his present advantages. The 
railroad, which has doubled the value of his 
farm and products, and for the completion of 
which he ardently longed, soon becomes to him 
an offensive monopoly. 

One hundred years ago, it cost three dollars to 
transport a barrel of flour one hundred miles ; 
and salt, which was a cent a pound at a seaport, 
often cost six cents at an inland market. 



RAILROADS, AND THEIR CONSOLIDATION. 193 

A part of the price of all products is made 
up of their cost of carriage from the place where 
they were grown or manufactured. Often a 
slight decrease in transportation charges, cre- 
ates new business, and enlarges that before 
established a hundred-fold, rendering necessary 
a large -increase in the labor required. 

When railroads were in their infancy, it was 
assumed that they would be public highways, 
and that every shipper would use his own cars, 
or trains, paying the company a toll for the use 
of their track. As business increased, it was 
soon found that such a plan was utterly im- 
practicable. The present clamor for restrictive 
legislation is perhaps a remnant of this anti- 
quated idea, and much of that proposed is no 
more practical. A railroad is not merely an 
improved public highway, but is a great and 
complicated transporting machine, requiring the 
highest order of ability for its successful opera- 
tion. We are mainly considering public inter- 
ests, as related to railroads, but will briefly 
look at those of investors. We have seen that 
it is a natural law, that, as the interval be- 
tween the investor and investment increases, 
the dangers from waste and mismanagement 
increase in like proportion. On this point, 
Mr. John B. Jervis, in his able work on 

13 



194 NATURAL LAW IN THE BUSINESS WORLD. 

railway property, says : " This kind of invest- 
ment is not well suited in general to small pro- 
prietors so situated that they can exercise no 
control, and who are exposed to the danger of 
having their property managed by unfaithful 
men, who seek to make the institution subser- 
vient to their interest, rather than to that of the 
proprietors." 

While restrictive legislation on the subject 
of railroad tariffs is unwise, and contrary to the 
natural law of supply and demand, there is a 
field for legislation which has received but little 
attention, and one as fully in accord with Nat- 
ural Law, as legislation to prevent dishonesty, 
or breach of trust. We suggest enactments, 
making it illegal, with heavy penalties, for any 
railroad official, or manager, to buy or sell the 
stock of his road, except as an investment, and 
then only after public notice. He should also 
be required to make oath each year that he has 
not, and loill not, make any speculative sales 
or purchases indirectly, or through any third 
parties. Here is a practical field for legisla- 
tion that would promise good results. Kail- 
road managers control a valuable trust, and if 
they profit by their superior knowledge, to the 
detriment of other stockholders, it is a moral 
wrong, which it seems proper to make a legal 



RAILROADS, AND THEIR CONSOLIDATION. 195 

offence. The peculiar knowledge incidental to 
official position is, morally, as truly the prop- 
erty of the stockholders as the track or roll- 
ing stock. If fluctuations are produced by 
mutual combination, or understanding, among 
managers for self-profit, it partakes of 'the na- 
ture of a conspiracy. These great evils natu- 
rally cause that general distrust and suspicion 
which largely prevail in regard to official 
conscientiousness and integrity. Sworn state- 
ments, showing details of condition and busi- 
ness, after the nature of those made by national 
banks, should also be required at stated inter- 
vals. We earnestly recommend a trial of such 
legislation, which has a natural basis, instead 
of the artificial and impractical kind, which is 
opposed to Natural Law. 

The remarkable movement towards consolida- 
tion, which has taken place during the last two 
or three decades, deserves attention. Popular 
sentiment is distrustful of such growing aggre- 
gations of capital and power, and some look 
upon them as an evil, and even as a menace to 
our institutions. The fact that consolidation is 
not only caused by Natural Law, but is also 
ruled by it, is entirely overlooked. If the 
process went on, until there was only one 
gigantic system in the whole country, it would 



196 NATURAL LAW IN THE BUSINESS WORLD. 

still be subservient to the imperial edicts of 
supply and demand. If it made an effort to 
make artificial rates, or those that were even a 
little above the normal, then in a greater pro- 
portion demand would fall off, and business 
and profits would decrease. If a normal -rate 
were restored, demand for service would be 
so much enhanced that financial gain would 
result. Supply and demand perform their office 
as quickly and surely as the " governor " of a 
steam engine. 

The earliest railroad charters were for short 
independent lines. In England they averaged 
only fifteen miles in length. In 1847, five- 
thousand miles were owned by several hundred 
different companies. In 1872, thirteen thousand 
miles were nearly all owned by twelve companies. 
This tendency has been nearly as marked in our 
own country. As a single instance, that part of 
the New York Central line between the Hudson 
Kiver and Lake Erie, originally belonged to 
sixteen different companies. During the last 
decade the development has been, not merely 
into longer lines, but into great systems. Many 
of these now embrace from two thousand to six 
thousand miles of road, and form arteries through 
which commercial currents flow, giving life to 
great domains, each larger than some of the 



RAILROADS, AND THEIR CONSOLIDATION. 197 

entire kingdoms of the Old World. What is 
the cause of this general and rapid consolida- 
tion ; what its tendencies, and what will he its 
results ? It has taken place not by chance, nor 
for any local or temporary reasons, but in obe- 
dience to the pressure and behests of unvarying 
Natural Law. The natural demand for decreas- 
ing rates for transportation, together with com- 
petition, have made it indispensable. It is a 
case of the " survival of the fittest," and of a 
development of the lower into the higher. In 
no other way could such remarkable reductions 
in rates and vast increase of business have been 
brought about. Under no other plan would 
such a degree of perfection in appliances and 
rapidity oi service be possible. Modern con- 
venience, comfort, and luxury are the result of 
the law of combination and consolidation. Con- 
trast the present passenger service with that 
of thirty years ago. A passenger leaving New 
York for Chicago not only paid a much higher 
fare, but had to change at the end of each sep- 
arate short line, and as often stand in line to get 
baggage rechecked and reloaded, subject to 
frequent lack of connection, long hours of wait- 
ing, and other numerous discomforts. One 
consolidated system, of a thousand miles in 
length, can render to the public a service which 



198 NATURAL LAW IN THE BUSINESS WORLD. 

is immeasurably superior in luxury, cheapness, 
speed, and safety, to that which would be pos- 
sible with aliy half-dozen distinct corporations. 
Notwithstanding the talk of monopoly, rings, 
pools, and extortion, the fact remains that rates 
for both freight and passenger service are 
steadily tending downward, and will probably 
so continue. . This is in obedience to the nat- 
ural principles of suppty and demand, and 
competition, and regardless of legislation. 
Greatly improved appliances, wielded by wider 
and more thoroughly organized control, cause 
the normal rates for service to decline, and nat- 
ural principles are ceaselessly pressing actual 
rates into conformity. A normal rate is that 
point above which demand falls off so rapidly 
that profits diminish, and below which even a 
great increase of business would lessen them. 
The problem with railroad management is, 
therefore, to make the nearest possible approx- 
imation to it. It varies with every road, and 
with every different class of freight, and is a 
very complicated question, and one entirely 
beyond and out of the province of legal enact- 
ment. How much each particular variety of 
freight will bear, without in any way hindering 
its greatest possible increase and development, 
is a very delicate problem, and must be solved 



RAILROADS, AND THEIR CONSOLIDATION. 199 

with great cure. Legislation is futile, not only 
because price-making is outside of its province, 
but because no two roads are alike in business, 
location, cost of maintenance, character of 
traffic, and many other conditions. There is 
the same variety in these as in individual enter- 
prises. To a very great extent, rates fix them- 
selves, and the power of the management, in 
that respect, is greatly overrated. Suppose 
two or more competing lines enter into a "cast- 
iron" agreement to fix rates that are somewhat 
above the normal. How soon shipments "foil 
off," rival routes or water transportation com- 
pete, markets are disturbed, and speedily the- 
" cast-iron " becomes sand ! Take the extreme 
case of a road that has no possible competition. 
If even such a road attempts to impose artifi- 
cial rates, business is hampered, settlement of 
tributary territory discouraged, manufactures 
excluded, and profits actually diminished. Rail- 
road men have not yet all become aware of 
these facts, but they are rapidly learning them, 
and also that a broad and liberal policy is the 
most profitable. In no other kind of business 
is the old, familiar principle of " large sales and 
small profits" so applicable and profitable as in 
railroad transportation. The reason for this is 
that a large part of the expenses consist of 



200 NATURAL LAW IN THE BUSINESS WORLD. 

"fixed charges," which are unchanged, whether 
the traffic be large or small. Outside of these, 
expenses increase much more slowly than the 
amount of business. An increase of twenty- 
five per cent, in general expenses might be 
sufficient for a business one hundred per cent, 
greater. A system of five thousand miles 
would probably not cost half as much to operate 
as it did formerly, when made up of a dozen 
distinct corporations. It has one board of 
management, instead of many ; unity of pur- 
pose, in place of diversity ; single and thorough 
organization, instead of inharmonious variety. 
The friction of one large wheel is much less 
than that of many small ones, and its power 
and momentum vastly greater. Consolidation 
should be considered as the greatest labor and 
expense saving process of the age. Why 
should " reformers " make such efforts to excite 
popular prejudice against consolidations? Is it 
simply because they are great? This is an age 
of great things, and of great privileges and 
benefits that are lightly appreciated. A dema- 
gogical cry of "monopoly" seems to be all that 
is necessary to arouse unthinking popular prej- 
udice. The greatest possible consolidation is 
hedged in on every side by the impregnable, 
though invisible, barriers of Natural Law. 



RAILROADS, AND THEIR CONSOLIDATION. 201 

With constantly diminishing rates for service, 
and increasing safety, luxury, and rapidity, it 
has not yet been explained how the modern 
railroad can be a "menace, "either to the citizen 
or to the government. Granted that sharp 
practice, stock watering, and many abuses 
exist, both in the construction and operation of 
these great thoroughfares. The systems are 
here, and to remain, and the public gets the 
advantage. Abuses are incidental to every 
enterprise, no matter how meritorious ; and 
this will be the rule as long as the element of 
selfishness is dominant in human nature. Sta- 
tistics show that, in a majority of cases, the 
first stockholders and builders sunk the money 
invested, and that the lines are afterwards 
operated by other and different proprietors, 
who purchased the assets at a nominal price. 
In general, no other investments pay as small 
a rate of interest as those in railroad property. 
Stock watering is indefensible as a system, but 
even here a candid view will show that, in some 
cases, it is only a "marking up" of nominal 
value to correspond with what has taken place 
in real value. The enhancement of market and 
taxable values, in terminal facilities and other 
kinds of property and improvements, is often 
considerable in a series of years. For in- 



202 NATURAL LAW IN THE BUSINESS WORLD. 

stance : If the taxable and salable value of 
a road has increased fifty per cent, in ten years, 
is an increase in the same proportion of the 
stock by which it is represented in any way 
unwarranted or illegitimate? While this is the 
popular impression, there seems to be no valid 
reason why railroad property should be excep- 
tional in this respect. 

Another prevalent fallacy is that stock water- 
ing necessarily results in a higher tariff. We 
have already shown that rates are made by 
causes entirely different. If the nominal 
amount of the stock of any road was quad- 
rupled, or reduced in the same ratio, its 
material property remains unchanged. Its 
earning capacities, surroundings, facilities, and 
opportunities are neither increased nor dimin- 
ished. The normal rates at which business 
and profits are at the maximum remain as 
before. 

Wherever there is dishonest and extrava- 
gant management, the investor suffers ; but 
not the public, except indirectly. If unrea- 
sonable popular prejudice were gratified to 
the . extent that, by unfriendly legislation, 
these great corporations could be crushed, it 
would be found that scores of small owners 
would be ruined as often as one "millionaire" 



RAILROADS, AND THEIR CONSOLIDATION. 203 

was injured. A large majority of the stock 
and bonds of these corporations is widely 
scattered among thousands of small holders, 
including even many widows and orphans. 
The sagacious men, who, by their energy and 
capital, have given us these great facilities, 
had in view their individual profit ; yet they 
deserve some honor, and not w T holly reproach. 
Hundreds of millions have been lost by in- 
vestors, the benefit of which is now being 
realized by the public. The commercial im- 
portance of these far-reaching systems is, 
perhaps, excelled by their moral and polit- 
ical benefit, in unifying all our diverse sec- 
tions and interests. 

The highest order of executive talent is 
required for their successful management. 
The chimerical plan that the control of these 
vast interests should be assumed by the gen- 
eral government, to be the sport of politi- 
cians, and to be fought over every four years, 
seems unworthy of serious consideration. 

Cheap and rapid transportation has created 
new commercial centres, and millions of worth- 
less acres have not only been transformed into 
productive farms, but have practically been 
moved a thousand miles nearer to market. 
The ff long-haul " business is entirely a thing 



204 NATURAL LAW IN THE BUSINESS WORLD. 

of recent times. The food products of the 
great trans-Mississippi region are found in 
the London market, competing with the pro- 
ductions of English meadows. 

Art, science, and literature have all felt the 
quickening influence of this movement. Noth- 
ing since the invention of the printing press 
has so accelerated thought and investigation. 
With the aid ®f its twin sister, the tele- 
graph, a nation becomes a vast neighbor- 
hood; and the pulsations of news, politics, 
morals, and religion are felt to the extremi- 
ties. Mind attains increased preponderance 
over matter. These great modern appliances 
open the natural way of advancement, and 
hasten the evolution of higher general con- 
ditions from lower. By Natural Law, phys- 
ical, mental, and moral attainment depends 
upon man's grasp and utilization of the forces 
with which nature's storehouse is overflowing. 



THE COKPOEATION. 



" While they are subject to abuses, they are great forces 
in production , and have their place in the economic functions 
of society." 

" Corporations cannot commit treason, nor be outlawed, 
nor excommunicate > for they have no souls." 

Sir Edward Coke. 



XV. 

THE CORPORATION. 

^FHE merits and- demerits of business corpora- 
tions are now the subject of so much 
popular discussion that it seems proper to 
briefly notice their relations to Natural Law. 
Civilized life and society are permeated by their 
operations, and we come in contact with them 
on every hand. Though they are fictitious per- 
sonages, they have many real personal quali- 
ties. They build and operate our railroads, 
telegraphs, and factories, transport our persons 
and property, manufacture our goods, and give 
employment to our labor and capital. They 
are peculiar to civilized life and society, and are 
not found to any extent under other conditions. 
Their existence and importance are entirely due 
to the natural law of organization. In the phys- 
ical realm, organization is a characteristic of 
life. It is everywhere present in nature, and 
forms unities which are composed of diverse 
elements. The human body is a unit, but it is 
made up of organs whose functions are dis- 
similar. 

Those nations and peoples who possess the 



208 NATURAL 'LAW IN THE BUSINESS WORLD. 

genius for organization, and understand its 
power, are distinguished for the number and 
variety of their corporations. Such were the 
ancient Romans. No people ever more thor- 
oughly comprehended the value of organization, 
and in Rome corporations had their beginning. 
The corporation of to-day, in England and 
America, is modelled after those which were so 
numerous and useful in the days of Roman 
civilization and dominion. 

In general, corporations are divided into three 
classes : first, the municipal, or those embra- 
cing cities, towns, and villages, and having a 
variety of functions ; second, the eleemosynary, 
or those which embrace colleges, schools, hos- 
pitals, and asylums ; third, those of a commer- 
cial or business nature. As the latter belong to 
the department under consideration, we shall 
confine our attention to them. 

Business corporations are creations of the 
State, formed for the prosecution of enterprises 
which cannot so efficiently be carried on by in- 
dividuals. Their object is the public good, 
though formerly, in England, they sometimes 
conferred special and exclusive privileges. 
They have rights and obligations of their own, 
which are not the rights and obligations of the 
individual corporators. Their distinguishing 



THE CORPORATION. 209 

characteristic is perpetual succession. A cor- 
poration can come to an end in three ways : by 
the death of all its members without successors, 
which is extremely improbable ; by a voluntary 
surrender of its charter ; or by a repeal of its 
charter by the State. Such a repeal is not held 
to be admissible in the United States, unless so 
provided in the charter, which is regarded as a. 
contract between the State and the corporators. 
A corporation can make its own laws, provided 
they do not conflict with the general laws of 
the State. In some respects it is not as free as 
an individual. Its path is marked out, and it 
must follow it, while the individual is free to 
make any contract which is not unlawful. Its 
duties are defined by its creator, and it lacks 
the spontaneous, elastic, and impressible nature 
which may characterize the individual. Hence 
the adage that " corporations have no souls." 
On the other hand, it possesses great advan- 
tages over the individual in perpetuity, limited 
responsibility, and powers of accomplishment. 
His business closes at death, but this imaginary 
personage lives on. It is a name in which in- 
dividuals act in specified ways and for definite 
purposes. 

Few individuals could build a railroad or a 
great factory ; but, if so, its business would 
14 



210 NATURAL LAW IN THE BUSINESS WORLD. 

have to be closed up or disposed of at death* 
Only by the natural power of organized effort 
can great enterprises be carried on. 

The rapid increase , in number and variety, 
of these organizations, and their growing power, 
are suspiciously regarded by public sentiment. 
Here, as elsewhere, it is easy to confound 
abuses with the system, and to overlook great 
usefulness and adaptation to necessities. We 
vastly overrate their power for harm, even if 
they had harmful motives. Their prosperity, 
as well as that of their corporators, is bound up 
in that of the body politic. As producers they 
are entirely dependent on demand, and can 
oblige no one to purchase their products, unless 
he thinks it for his interest. As purchasers 
of labor or material, no one is obliged to sell 
to them, except of his own free will. Even if 
the managing power of a corporation had sav- 
age instincts, it is securely caged by the natural 
principles of supply, demand, and competition, 
w T hich are stronger than iron bars. While the 
public is perfectly secure, stockholders are not 
always so safe. They' are behind the bars, and 
sometimes need to be saved from their friends. 
For this reason, we earnestly recommend a 
trial of such legislation as is proposed in the 
chapter on railroads. It is suited to all kinds 



THE CORPORATION. 211 

of corporations, and is in perfect harmony with 
Xatural Law. 

A corporation is like a colossal personality 
with magnified senses, or a powerful machine 
with every wheel and pinion adjusted to all its 
bearings. Each individual in the management 
is selected for his special fitness for the peculiar 
place, and he becomes an expert in the exercise 
of his function. Such organization has the 
strength and solidity of a pyramid. As regards 
their exercise of dangerous power, it should be 
remembered that they cannot sell their services 
or goods to an unwilling purchaser, and must 
court the demand they cannot coerce. Their 
transactions and contracts with others must be 
voluntary on both sides. It is, therefore, evi- 
dent that a large part of the public distrust of 
them has its foundation in prejudice and dema- 
gogism, and also in the ignorance of natural 
laws which hedge them in. If corporations 
were blotted out, we should be set back a cen- 
tury in everything that pertains to an advanced 
civilization. Our great inventions and discov- 
eries would fail of practical and general appli- 
cation. A better knowledge of Natural Law 
would dissipate many fallacies in regard to 
them, as it would also open our eyes to dangers 
that arise from its violation in other directions. 



CONCLUSION. 



" All nature'is but art unknown to thee ; 
All chance, direction which thou canst not see." 

Pope. 

li Up, my comrades ! up and doing ! 

Manhood's rugged play 

Still renewing, bravely hewing 

Through the world our vkiij" 

Whittier. 

11 That very lav: which moulds a tear 
And bids it trickle from its source, 
That laio preserves the earth a sphere 
And guides the planets in their course." 

Samuel Rogers. 

" Facts are stubborn things.", 

Tobias Smollett, 1721-1771. 



XVI- 

CONCLUSION. 

TS there a universal reign of law, and a fixed 
order of things? As far as the world of 
matter is concerned, all would probably give 
an affirmative answer. Fixed principles, rela- 
tions, and results are well understood in phys- 
ical science, and we are familiar with the prop- 
erties of bodies, their causes, effects, laws, 
operations, and phenomena. That the realm of 
Natural Law is universal, including also the 
mental and moral nature of man and its opera- 
tions, is not so generally understood. Nature 
and its laws must be taken as including all 
that is 

" In the round ocean, and the living air, 
And the blue sky, and in the mind of man." 

There is no spontaneity in nature. We must 
conclude that those events which are inexplica- 
ble to us occur in accordance with natural laws 
with which we are unfamiliar. It is but a step 
further to recognize such laws as the methods 
of the Creator. It follows that, wherever we 



216 NATURAL LAW IN THE BUSINESS WORLD. 

can define and trace them, they are entitled to 
our respect. If they come from such a source, 
they cannot be violated with impunity. If we 
attempt to cross them, instead of walking in 
harmony with them, our path will not be a 
smooth one. If, therefore, the tendencies and 
principles which pervade the business world are 
subjects of Natural Law, they are worthy of 
our careful attention. If we have in any meas- 
ure succeeded in interpreting them in the fore- 
going chapters, our labor has not been in vain. 
If the deductions made are in harmony with 
experience, with the known qualities of man's 
constitution, and are uniform in their effects 
and application, we are warranted in assuming 
that they are natural laws. For instance, we 
have found that the law of supply and demand 
is fundamental and universal, and that it is 
futile and injurious to oppose it. It appeared, 
that under all free conditions, these two ele- 
ments will equal each other, and that the ful- 
crum upon which they are balanced is adjusted 
by price and competition, until the equilibrium 
is perfect. To oppose these natural forces has 
always caused trouble, and always will. They 
are like great ocean currents that move silently, 
but powerfully ; and any attempt to obstruct 
them by artificial barriers will result in turmoil 



CONCLUSION. 217 



and confusion. Nature's methods cannot be 
equalled, much less improved upon. Herein 
lies the vital defect with labor combinations. 
Their conflict is not with employers or capital- 
ists, but with the law of supply and demand. 
They are, apparently, not aware that their con- 
test is with nature, and that it is impossible to 
overcome or repeal a Natural Law. Nothing 
but improved education will show them that 
those who goad them on in this combat are 
not their true friends. Demand for labor or 
productions cannot be coerced, but must be 
attracted and stimulated. The idea of a neces- 
sary and natural antagonism towards employers, 
is the foundation of all labor combinations. 
With that error for a starting-point, a whole 
system has been evolved. In the light of Nat- 
ural Law we see that such combinations are 
unfavorable to individual merit and industry > 
and good production. Men learn to depend on 
the coercive power of the union, and not on 
individual merit. They become subjects of a 
tyranny, exercised by irresponsible tribunals, 
which order them " in " or w out," regardless of 
their own wishes and interests, and who lead 
them to persecute unorganized laborers whose 
legal rights and privileges as American citizens, 
are not inferior to their own. A strike which 



218 NATURAL LAW IN THE BUSINESS WORLD. 

overflows its original limits, until it involves 
great public interests remote from the original 
cause, is a species of coercion whose damage is 
a thousand-fold greater than any possible bene- 
fit, even if successful. 

Any impartial observer, who has noted the 
late writings and utterances of the leaders in 
labor agitation, will be forced to the conclusion, 
that these organizations are fast assuming the 
character of schools for the dissemination of 
socialistic ideas. It is a remarkable and sig- 
nificant coincidence that Congress, after trying 
many experiments for civilizing the Indians, 
has at last reached the true conclusion ; that the 
one indispensable necessity is individual owner- 
ship of land ; while at the same time our " re- 
formers " are advocating a return to the Indian 
method of a general ownership of land. This 
must, indeed, be a singular kind of reform, 
which turns so sharply in the direction of 
barbarism. 

We have found that labor is natural and hon- 
orable ; that mental toil, not less than manual, 
is truly labor. We have seen that the theory, 
that the value of a product is based upon the 
exact amount of physical labor put into it, is 
fallacious ; and that exchangeable, or market 
value, is true value. A lamp of clay and a 



CONCLUSION. 219 



nugget of gold may have cost the same amount 
of physical exertion ; but their vahae consists 
in what they can be exchanged for. It has also 
been shown that mental labor plays as impor- 
tant, and a higher part in production, than 
physical. Production is always the joint result 
of both. This disposes of the specious social- 
istic theory, that, as every product is produced 
by labor (meaning only physical), it should 
belong to the laborers. 

The condition of the manual laborer, in this 
country, is not a fixed one ; but his goal is the 
possession of accumulated labor, or capital. 
The road to this condition is open, and has 
been trod, step by step, by nearly all who 
have attained the desired result. 

Man's nature is such that a tendency toward 
deterioration begins, and independence and 
self reliance decay, when he depends upon any- 
thing outside of himself and his individual 
merits. 

Employers have serious responsibilities de- 
volving upon them. They should treat their 
employes like men, and not machines. A 
kindly interest in their physical and moral 
welfare is a positive duty, and tends to advance 
the interests of both, and of society. A system 
of profit sharing is worthy of trial, to harmonize 



220 NATURAL LAW IN THE BUSINESS WORLD. 

interests that men have been taught to believe 
were antagonistic. Labor and capital can only 
prosper to their best and fullest extent, when 
the fallacy of antagonism is exploded. 

It is plain that extra legislation is no cure for 
the ills of society. It cannot take the place of 
conformity to Natural Law. Official methods 
are cumbersome, wasteful, and subject to numer- 
ous abuses from the nature of the case, and 
should be limited to those enterprises which, 
from their public character, are properly beyond 
private control. The writer has no partiality 
for corporations ; but he has endeavored to show 
that their power, and even their disposition, for 
harm, have been greatly overrated. Their in- 
terests are identical with those of the rest of 
society, and it should not be forgotten that they 
are the subjects of Natural Law, and in no 
respect its sovereigns. 

We are aware that some of the conclusions 
arrived at are not in harmony with prevailing 
public sentiment, but we have made an earnest 
endeavor to sift out and retain the truth, re- 
gardless of its popularity. We believe that 
nothing is gained in the end by shutting our 
eyes to facts, even if they are distasteful to our 
wishes and opinions. Our work will, doubt- 
less, be classed by some as one inimical to labor, 



CONCLUSION. 221 



because we have spoken plainly of the abuses 
that are done in its name. They are excrescences 
which disfigure its fair proportions. We are 
impelled to this work by a sincere regard for 
what we believe to be the best interest and 
prosperity of working men. We respect and 
honor them ; but we do not indorse the schemes 
of their self-constituted champions. Many of 
them are, no doubt, honest ; but we believe 
them mistaken. They have assumed, as a start- 
ing-point, the idea that there are two naturally 
and necessarily antagonistic interests existing 
in society. If this is true, their position is 
logical and correct. Our theory is, that society 
is a unit, like the human body, composed of dif- 
ferent members, whose functions are unlike, 
but which altogether form a complete whole. 
When one member suffers, all suffer; and when 
one rejoices, all rejoice. 

We have endeavored to prove that class prej- 
udice, which is so persistently stimulated by 
labor leaders, is injurious to all, especially to 
the interests of the laboring man. We yield 
to none in sympathy for the poor, the suffering, 
and the dependent ; and our only object has 
been to point out to them the road to prosperity 
and independence. Their condition can never 
be bettered by the envy and abuse of those who 



222 NATURAL LAW IN THE BUSINESS WOULD. 

are more favorably situated, nor by blocking 
the wheels of business to coerce a demand for 
their services. We ask the thoughtful and in- 
telligent laborers of America to be guided by 
reason, rather than prejudice. We warn them 
that many, under whose lead they are now 
marching, are giving them bad advice. If, in 
the course of these chapters, some unpleasant 
conclusions have been reached, we have been 
forced to them by the logic of unvarying Natural 
Law, and not by choice. We would like, most 
heartily, to see every laboring man in America 
have high wages, and steady work ; but nothing 
can bring this desirable condition a^out, but 
industry, patience, providence, temperance, and 
public confidence. We have endeavored to do 
labor, as well as society at large, a service by 
these plain words. We invite all classes and 
interests to give them a fair and candid con- 
sideration. 












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